Status of the Green Claims Directive
Since the end of January 2025, the Green Claims Directive, which aims to promote transparent sustainability communication, has been the subject of a three-party negotiation process within the European Union’s legislative procedure between the Commission, the Council and the European Parliament. There have now been new developments in the latest negotiations: according to diverging media reports, “the EU Commission is to stop the planned environmental law” , while others see the future of the directive as “uncertain”.
At its core, the Green Claims Directive provides for mandatory prior verification of all environmental claims, including life cycle analysis. From the outset, the proposed directive was met with considerable criticism due to fears of high bureaucratic costs and equally high expenses. The effect of “greenhushing” whereby companies remain silent about their sustainability efforts due to high costs and the threat of penalties, was also anticipated in some quarters. The decisive factor in the Commission’s announcement that it was withdrawing the proposal was primarily the applicability of the Green Claims Directive to the approximately thirty million micro-enterprises in the EU. According to reports, this position was revised a few days later, as there was still no agreement within the College of Commissioners. It is still uncertain how the directive will be dealt with under the Danish Presidency.
Considering these developments, will environmental claims now remain unregulated? Certainly not!
Green brands are brands that express an environmental or sustainability aspect through words or graphic design which applies to a large segment of all brands today. In Germany and Austria, there is already a tried-and-tested control system for these brands in the form of unfair competition law, which applies strict standards to advertising with environmental claims. An example of this strict case law is the ruling of the Federal Court of Justice (BGH) of 20 February 2025 on the CPC Regulation in proceedings brought by the Federal Environment Agency (UBA) against Flixbus. A Belgian authority had requested the UBA to take action against misleading environmental claims made by Flixbus (enforcement request under the CPC Regulation (Regulation (EU) 2017/2394). In response, the UBA had already prohibited Flixbus in January 2023 from advertising to consumers with the statement that long-distance buses were the most environmentally friendly means of transport. The UBA also objected to the CO2 compensation that Flixbus offered travellers as an additional service. The Federal Court of Justice confirmed this decision and confirmed the powers of the authorities under the so-called CPC network.
Action point: how far do green and social claims comply with the EmpCo Directive?
The Empowering Consumers Directive (EmpCo Directive), which must be implemented by EU Member States by 27 March 2026 and will apply from 27 September 2026, tightens the requirements for “green advertising”.
This means, regardless of the hotly debated Green Claims Directive, new rules for environmental communication in the EU will apply from September 2026. These include:
- New, strict requirements for “general environmental claims” relating to advertising using terms such as “green”, “sustainable”, “environmentally friendly” and “ecological” (the underlying recognised outstanding environmental performance must be proven by the entrepreneur and the environmental claim must be specified “in the same medium”). In our opinion, this means in practice that brands will often only be permitted with specific environmental claims, which seems unattractive from a marketing perspective, as any use of the brand will require an asterisk reference for specification.
- New rules on advertising with compensation measures and a general ban on product-related advertising with compensation statements (CO2 compensation statements are only permitted if they refer to the actual impact on the entire life cycle of the product in question (i.e. production, use, disposal) and not to the offsetting of greenhouse gas emissions outside the product’s value chain).
- Strict guidelines for advertising future environmental performance (this applies to statements in the B2C sector, such as “We will be climate neutral by 2050!”), which will require a detailed and realistic implementation plan in future. The company’s progress must be verified by an external expert, whereby the German draft bill for the implementation of the EmpCo refers in particular to environmental verifiers approved under the Environmental Audit Act as experts.
- New rules on advertising with “social claims” which concern the requirements for evidence to support statements on issues such as fair wages, working conditions, species protection or diversity.
Will private sustainability labels be a thing of the past from 27 September 2026?
A central provision within the EmpCo Directive concerns “sustainability labels”, which are voluntary trust marks aimed at highlighting a product or company in terms of environmental or social aspects. With effect from 27 September 2026, a new provision in the “black list” to the UWG will prohibit the use of such labels unless they have been established by a government agency or are based on a certification system within the meaning of the EmpCo requirements, i.e. they meet strict transparency, objectivity and independence requirements. In plain language, this means: No more self-certification!
In principle, almost all green brands can be classified as sustainability labels if they pursue the goal of highlighting or promoting ecological and/or social characteristics. Guarantee marks can also be sustainability labels and, according to EmpCo, may only be used if they have been established by government agencies or are based on a certification system.
One of the most hotly debated questions here is whether top employer awards, meaning labels such as “Best Employer” or “Top Employer”, will only be permitted within the framework of the certification system in accordance with EmpCo from 27 September 2026 onwards. The idea discussed in Austria of preventing the risk of classification as a sustainability label by stating that a mark is not a sustainability label but a trademark would require a very clear indication (such as “this is only a trademark and not a trust mark or quality label”) and reaches its limits with the definition of sustainability labels specified by EmpCo. In principle, therefore, a label or mark is not a sustainability label within the meaning of EmpCo if, in the understanding of the relevant public, ecological and/or social characteristics play only a very minor role.
This raises some interesting questions about how to draw the line in practice.
EmpCo does not provide for any transition periods. Product packaging that is already being produced or will be produced with a minimum shelf life beyond 27 September 2026 should already be ‘EmpCo-compliant’. Alternatively, this packaging would have to be “labelled” in stores before the effective date, which is especially unattractive for premium products.
Are your brands and labels already EmpCo-compliant?
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Dr Wiebke Baars, Partner at Taylor Wessing in Hamburg, specialises in consulting and litigation in intellectual property and competition law. She advises clients from the consumer goods and life sciences industries, with a focus on issues relating to green claims.
Dr Martin Prohaska-Marchried, Partner at Taylor Wessing Austria, specialises in advertising law, provides ongoing advice on green claims and has been representing companies in court in Austria for over 25 years, particularly in proceedings under the Unfair Competition Act (UWG).
LinkedIn profil Dr Martin Prohaska-Marchried
Andreas Bauer, Partner at Taylor Wessing in Munich, is a recognised expert in the field of green advertising and green brands. He has been involved in several “climate neutral” court cases. At the same time, he supports companies in adapting to the new challenges arising from the current controversial developments regarding green claims at EU level.
