Green Claims Under The Microscope: New Rules For EU And Non-EU Businesses

Businesses must grapple with increased regulation when making environmental claims and using sustainability labels.

Introduction

From September 27, 2026, EU member states are required to apply the EU’s new “Empowering Consumers for the Green Transition Directive” (the ECGT Directive), which will regulate environmental claims and sustainability labels across all business-to-consumer (B2C) commercial practices in the EU. It applies regardless of sector, and irrespective of whether the trader or product originates from outside the EU.

Claims and marketing materials for products and services, both direct and online, that do not comply with the ECGT Directive will need to be reviewed and, where necessary, amended or withdrawn from September 27, 2026—for example, by correcting existing environmental claims on packaging and promotional content.

Crucially, the ECGT Directive expands the list of “blacklisted” prohibited commercial practices set out in the Unfair Commercial Practices Directive (UCPD) and simultaneously expands the scope of commercial practices that may be deemed to be misleading. Businesses will therefore need to be careful when promoting or selling consumer-facing goods and services—or risk enforcement. The ECGT Directive also amends the Consumer Rights Directive, imposing additional rules on the durability of goods.

The ECGT Directive is the EU’s most significant legislative response to growing concerns over “greenwashing” in light of a largely unchecked proliferation of sustainability labels and vague environmental claims.

Below, we unpack the key provisions and what they mean in practice for businesses.

Anti-greenwashing measures

Businesses will now need to tread carefully when claiming that their products, brands, or operations have a positive or zero environmental impact or that they outperform competitors on sustainability. Several conditions must be satisfied before making such claims, depending on the type of restriction. For example, traders making claims about future environmental performance must set out clear, objective, publicly available and verifiable commitments in an implementation plan with specific, measurable targets, and progress being regularly verified by an independent third-party expert.

Other commercial practices are now more heavily regulated, including:

• “generic environmental claims”, such as “eco-friendly”, “green”, “climate friendly”, or “energy efficient”, where the trader is not able to demonstrate recognized excellent environmental performance relevant to the claim. These are specifically prohibited. The ECGT Directive interprets this very broadly: even the use of images (e.g., trees) or colors (e.g., blue or green) may be considered misleading. This could also capture consumer-facing activity by financial institutions, such as a bank marketing “green” savings accounts or “eco-friendly” mortgage products;
• environmental claims about an entire business or product when they relate only to a specific aspect (e.g., claiming goods are made from recycled materials when those materials represent only, for instance, 10% of the product). These claims are prohibited;
• claims that a product has a neutral, reduced, or positive environmental impact based on the offsetting of greenhouse gas emissions are now outright prohibited. This effectively bans common marketing formulations such as “climate neutral” or “carbon positive” where they rely on offsetting rather than an assessment of the actual lifecycle impact of the product;
• descriptions of the environmental and social characteristics of a product, including the environmental and social aspects, impact and performance of a product, as well as related descriptions, such as quality and fairness of working conditions, respect for human rights and equal treatment and opportunities; and
• comparing products with those of competitors by way of their environmental characteristics, social characteristics, or circularity aspects (such as durability, repairability or recyclability). There are now enhanced restrictions around these.

The new regime is focused on the voluntary use of environmental claims. Importantly, where a claim includes messages or representations that are mandatory under EU or national law (e.g., under the Corporate Sustainability Reporting Directive¹), they are not caught by these new restrictions. Nonetheless, if a company repurposes information from, for instance, its mandatory sustainability reporting in voluntary advertising or marketing directed at consumers, that communication would fall within the scope of the ECGT Directive.

Sustainability labels

Sustainability labels are also subject to enhanced scrutiny. From September 27, 2026, sustainability labels that are not based on a publicly available, transparent and verifiable certification scheme, or not established by public authorities, will be prohibited.

A sustainability label refers to any trust or quality mark that promotes a product, process, or business by reference to its environmental and/or social characteristics. However, this does not include any mandatory label required under EU or national law.

Early obsolescence and durability

The ECGT Directive introduces new prohibitions on claims focused on the durability of a product, including:

• commercial communications relating to goods with features introduced to limit their durability (such as software that downgrades functionality after a set period), where information on that feature and its effects on durability is available to the trader;
• falsely making a claim about the durability of goods in terms of usage time or intensity;
• presenting goods as repairable when they are not; and
• inducing consumers to replace consumables earlier than is technically necessary.

In addition, the ECGT Directive amends the Consumer Rights Directive to impose new, wide-ranging rules on product durability. These include requirements to provide consumers with specific information about software updates and the expected lifespan of products.

Key takeaways for businesses

Review existing marketing, claims and labels

Businesses should review their marketing materials, product packaging, and online content, including any brand or product names that convey an existing environmental message, whether explicitly or implicitly, regardless of intellectual property protection. Businesses must either substantiate “generic environmental claims” by demonstrating recognized environmental performance standards or replace them with specific, verifiable claims. Sustainability labels must meet the new certification scheme requirements, and businesses should scrutinize product lines marketed on the basis of carbon offsetting or future environmental performance.

Expect greater regulatory scrutiny and inconsistency around member state enforcement

The relevant national competent authorities enforce the UCPD and Consumer Rights Directive. By "blacklisting" additional prohibited commercial practices, the ECGT Directive lowers the threshold for enforcement, hence businesses should pay close attention to existing enforcement guidance in applicable member states. For example, in Ireland the Competition and Consumer Protection Commission may issue compliance notices and fixed payment notices and apply for prohibition orders. In the Netherlands, the Authority for Consumers and Markets may impose fines of up to EUR900,000 per violation or 10% of annual turnover and/or issue administrative orders subject to penalties (last onder dwangsom).

Monitor and mitigate litigation risk

The expansion of prohibited practices under the UCPD increases the risk of litigation, including representative actions. While fewer greenwashing cases were filed globally in 2024 than in 2023, this remains a growing area of litigation with a high claimant success rate—60% of cases filed between 2020 and 2024 were classified as successful². The ECGT Directive may fuel further claims once national implementing legislation starts to apply from September 27, 2026.

There is a risk, however, that by raising the compliance threshold the ECGT Directive may inadvertently fuel “greenhushing”, being where companies scale back their sustainability messaging to avoid legal scrutiny, particularly given the high success rates of greenwashing litigation. On the other hand, proponents argue that the Directive’s focus on misleading and generic claims should ultimately encourage businesses to make more substantiated and specific environmental claims.

Review your governance arrangements

Businesses should review their existing governance processes and policies, putting appropriate steps in place and ensuring there is sufficient oversight to adequately consider the nature and effect of green claims and products before they are published.

Interplay with other legislation

Businesses operating across different markets globally will need to manage different and perhaps conflicting regulations. It will therefore be important to monitor local developments and ensure robust governance procedures are in place to identify their potential effect. For instance, in March 2023, the European Commission adopted a proposal for a Directive on Green Claims³, intended to complement the ECGT Directive by making green claims reliable, comparable and verifiable. However, that proposal has reportedly been put on hold, and its future is uncertain. Meanwhile, businesses also operating in the UK will need to ensure compliance with the CMA’s Green Claims Code, guidance from the Advertising Standards Authority and, as relevant, the Financial Conduct Authority’s anti-greenwashing rule.

Footnotes

1. See our article on the changes to the Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive made by the EU’s Omnibus package.

2. Global trends in climate change litigation: 2025 snapshot.

3. See our article on the measures proposed by the Green Claims Directive to enhance consumer protection against greenwashing.