The European Commission is planning to pull the plug on its Green Claims Directive.
The news has generated plenty of chatter among EU institutions, with many officials taken by surprise at how abruptly the axe has fallen. While it has been well known that securing agreement on the technical details of the directive would be challenging, few anticipated such a swift withdrawal.
The Commission has indicated that this about-turn is in line with its desire for simpler rules and reduced bureaucracy, but it has still left numerous EU lawmakers, businesses, and consumer rights advocates scratching their heads over what will happen next, given that the rules appeared to be in their near-final form.
In announcing its intention to withdraw, the Commission has pointed to the danger that the rules could have become excessively bureaucratic - an outcome that risks undermining the ease-of-doing-business narrative that will be important to the EU as a whole.
The move has caused significant confusion among Member States and Members of the European Parliament, many of whom expected further discussions to continue regardless of any Commission misgivings. Indeed, some lawmakers have voiced concerns that scrapping the proposal now could undermine the continent's credibility on environmental policy—or, at the very least, send a mixed message to businesses genuinely striving to market sustainable products in good faith. Despite all this, the Commission maintains that it has not entirely abandoned the idea of stronger controls on green claims, but that the directive as it stands no longer aligns with its simplification goals.
Companies, including advertising and marketing professionals, were bracing themselves for new compliance obligations - particularly around substantiating green claims and ensuring communications did not over-promise on environmental credentials.
So, why was this piece of legislation seen as so significant in the first place? For a start, the Green Claims Directive was intended to clamp down on misleading green marketing statements and so-called "greenwashing." In essence, it would have required companies to back up any eco-friendly or sustainability claims with verifiable evidence, ensuring a higher degree of transparency for consumers. The rules were very burdensome and unclear, for example, they required independent verification of green claims before such claims could be used in marketing or labelling, and they effectively banned reliance on carbon off-setting as a basis/justification for many types of green claims.
Aside from green campaigners, many businesses will be relieved by this. However, it would have been useful to have harmonised rules across EU member states, ensuring a consistent approach to environmental claims and consumer protection.
In the UK, green claims are largely treated like any other claim in terms of the rules that apply - and misleading claims (including misleading green claims) are prohibited under the DMCC Act, under which the CMA can investigate and issue large fines of up to 10% of annual global turnover. It is likely the EU will take a similar approach, applying existing rules that prohibit misleading claims.
In the UK, our advice to clients has not changed in light of this news from Brussels. It remains essential to ensure that any environmental or sustainability claims in advertisements are carefully substantiated, in line with existing consumer protection rules and industry codes. Regulators in many countries—and certainly the UK—continue to scrutinise companies for overstated, unsubstantiated, or vague green messages. Even with the Green Claims Directive reportedly off the table, brands would do well to treat their environmental statements with caution, given the ever-growing demand from consumers and watchdogs alike for greater transparency and honesty in green marketing, and the threat of large fines.
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