EU Green Claims Directive – What Does It Mean For Companies?

Introduced by the European Commission (the "Commission") in March 2023, the EU Green Claims Directive (the "GCD") seeks to establish clear criteria for substantiating environmental claims. In March 2024, the EU Parliament adopted the draft directive, which is now at the trilogue phase. The GCD is expected to come into force in 2027. It further complements the Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825), which amends existing consumer protection laws to address unfair commercial practices related to greenwashing.

Under the GCD, the EU will introduce extensive regulations on the requirements for permissible environmental claims. The objective is to prevent greenwashing so that consumers can trust information about the environmental impact of products and make informed decisions when choosing more sustainable products.

What are green claims?

The GCD aims to ensure EU consumers receive reliable, comparable and verifiable environmental information on products and targets all voluntary environmental claims made in a business to consumer (B2C) context. Examples of such green claims include claims such as "sustainable", "climate neutral" and "packaging made from 30% recycled plastic".

Until now, companies have not had to verify or substantiate such environmental claims and according to a recent 2020 study conducted by the EU Commission, the majority of these claims were found to be vague, misleading and unfounded with 40% being unsubstantiated.

The proposal targetsexplicit claimsthat:

• are made on a voluntary basis in a B2B context;

• cover the environmental impacts, aspects or performance of a product or the trader itself; and
• are not currently covered by other EU rules.

Importantly, in relation to the last point, the GCD does not cover claims that are already mandated and governed under another regulatory framework. This requirement is closely linked to the requirements under other EU sustainability and product legislation such as the new Packaging and Packaging Waste Regulation (the "PPWR") where specific requirements for the level of recycled content a product's packaging must contain are outlined. Under the PPWR and indeed under the proposed GCD, only claims on recycled content exceeding these minimum amounts will be allowed to be made. For more information on the PPWR please see our recent article here.

Key obligations for companies

The proposed GCD sets out:

• clear criteria (based on scientific evidence)on how companies should prove their environmental claims and labels;

• requirements for these claims and labels to be checked by an independent and accredited verifier;and
• new rules on the governance of environmental labelling schemes to ensure they are solid, transparent and reliable.

The requirement that environmental claims on a product must be backed by scientific evidence also includes the consideration of the product's entire life cycle. Vague terms such as "eco-friendly" or "green" will be prohibited unless substantiated and comparative claims with other products must be based on equivalent data and methodologies.

The GCD introduces accredited, mandatory testing bodies that independently certify environmental claims and ecolabels in advance before companies are allowed to use them in communication with customers. If the requirements are met, the testing body issues a certificate of conformity that is recognised throughout the EU.

Legislative Status

The GCD is currently under trilogue negotiations between the Council, Commission and Parliament which began in January 2025. A provisional agreement is anticipated by mid-2025 and if the GCD is adopted in 2025, it is expected to become binding in 2027.

How should I prepare?

Companies with products currently on the EU market or planning to enter the EU market should prepare for the forthcoming requirements by:

• Reviewing any environmental claims made in relation to their company or product and assessing current marketing materials to ensure claims can be substantiated with scientific evidence.
• Engaging with accredited third-party verifiers to facilitate the required assessments.
• Training marketing and compliance teams on the new obligations to prevent inadvertent greenwashing.
• Monitoring the progress of the GCD through the final legislative stages and adapting commercial strategies accordingly.

Our dedicated EU Regulatory and cross-sector ESG teams continue to monitor the GCD and related developments. For further information on the GCD and how it might affect your company, please contact Koen Van Maldegem or Maud Grunchard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.