EU Green Claims Directive: Latest Guide

The EU Green Deal Industrial Plan recognizes that consumers are crucial in the green-transition and market transparency is a vital tool for empowering consumers to make more sustainable purchases.

A 2020 EU Commission study revealed that over half of environmental claims are vague, misleading, or lacking proof and verification. Despite a clear consumer desire for sustainable products, widespread greenwashing and misleading statements about environmental benefits have hindered the impact of these efforts. 

To address this, the Green Claims Directive sets clear standards for environmental claims.

By ensuring claims are reliable, comparable, and verifiable, it aims to empower consumers with trustworthy information about the environmental impact of products they are considering to buy. This will also create a more fair playing field for businesses that have been honest about their commitment to sustainability over competitors that have used greenwashing tactics.

This directive builds upon the EU's Directive on ‘Empowering Consumers for the Green transition’’ providing more specific rules for environmental claims, going beyond the general ban on misleading advertising.

The key objectives of the Directive are to: 

• Enhance environmental protection and accelerate the green transition towards a circular, clean, and climate-neutral EU.
• Protect consumers and businesses from greenwashing while empowering consumers to drive the green transition through informed purchasing decisions based on credible environmental claims and labels.
• Strengthen legal clarity for environmental claims, create a level playing field within the EU market, and boost competitiveness for businesses committed to sustainability.

The requirements of the Green Claims Directive in short:

1. Claims backed up by proof: Environmental claims need proof and this proof needs to adhere to specific requirements.
2. Communication rules: Rules about how an environmental claim is allowed to be communicated to consumers.
3. Environmental labels: Labels related to the environmental impact of a products, process or traders will have to meet criteria.‍
4. Verification of claims and labels: To verify if the rules for proof and communication of environmental claims, and environmental labels are being followed.
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What does the Green Claims Directive cover?

The Green Claims Directive applies to all companies operating in the EU. The directive focuses on explicit environmental claims made by traders about products, processes or the trader itself. Traders in this case are any individual or business involved in commercial activities.

This scope also includes:

• Small and medium sized enterprises: who should receive help from their national government to adhere to the requirements.
• Traders outside of the EU: who use explicit environmental claims targeted at EU customers.

Not in the scope: ‍

• Microenterprises: with fewer than 10 employees and less than €2 million turnover. They are exempt from the requirements, unless they wish to receive a certificate of conformity.

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It's important to note that The Green Claims Directive is a Directive — not a Regulation. In other words, EU countries must achieve these goals but can implement their own laws to do so.

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Green Claims Directive Requirements

The overall goal of the Green Claims Directive are created at the EU level to achieve more verifiable claims and establishes specific requirements.

Individual governments of the EU countries will have to create their own national laws to incorporate these requirements. The final content of the Directive is still being debated by the EU Council and Parliament.

Below are the current requirements. 

Requirement 1: Proof of the environmental claim

Only explicit, trusted environmental claims will be allowed on the EU Market. To prove this, they claim must be verified through an assessment: 

1. Specify if the claim: does it apply to the entire product/trader or a specific part?
2. Be backed-up by science: use accurate data, and relevant global standards.
3. Impact on the life-cycle: Show that the claim has a significant benefit on the life-cycle of the product.
4. Cover significant environmental impacts: Take into account all the relevant environmental factors. 
5. Address key environmental factors: Consider all relevant environmental impacts, not just those that paint a rosy picture.
6. Go beyond compliance: Prove that the claim surpasses basic legal requirements and offers a genuine environmental benefit.
7. Showcase superior performance: Demonstrate how the product or company outperforms industry standards in terms of environmental impact.
8. Assess trade-offs: Identify if the environmental benefit of the claim significantly worsens another environmental impact (such as circularity, protection of land, animal welfare etc.)
9. Be transparent about offsets: Clearly explain the nature of carbon offsets, whether they reduce emissions or remove carbon from the atmosphere, and how they are achieved.‍
10. Prioritize primary data: Use data directly related to the product's environmental performance. If unavailable, rely on credible data from comparable products or company processes.

For comparative environmental claims — such as stating that a product/trader has less environmental impact or better performance than the other — there are further requirements. Including: 

• Data consistency: Using identical data types and sources for both the claimed product and its comparison.
• Methodological consistency: Employing the same data collection and analysis methods for both products. 
• Scope consistency: Evaluating the same stages of the production process for both products, ensuring key processes are covered.
• Impact consistency: Assessing the same environmental factors for both products, focusing on the most significant impacts.
• Assumption consistency: Drawing conclusions from the assessment is done in a similar way.

For comparisons between products of the same trader or to a discontinued product from another trader, it must be clarified how this improvement impacts other environmental factors and specify the baseline year used for the comparison. 

Requirement 2: Communication of the claim

Communication of explicit environmental claims is only allowed when it is backed-up by the proof mentioned in Requirement 1. 

If a product's environmental impact depends on how it's used, clear instructions on proper use are necessary. Claims about future benefits should include a specific deadline. Overall environmental impact claims based on a combined score of different factors require official EU calculation rule.

Information about the product or company making the environmental claim, along with the evidence supporting it, must be easily accessible. This information should accompany the product in physical form or through a link, QR code, or similar digital format. 

That information should include at least the following:

• Environmental aspects, environmental impacts or environmental performance covered by the claim.
• The relevant Union or the relevant international standards, where appropriate.
• Underlying studies and calculations.
• Explanation how the benefits of the claim have been achieved.
• Certificate of conformity.
• For claims about greenhouse gas offsetting: the amount of offset and whether these offsets come from reducing or removing greenhouse gasses.
• A summary of these information points, in a clear and understandable way for the consumers targeted by the claim and should be provided in at least one of the official languages of the country where the claim is communicated.

Communication for comparative claims requires proof that the environmental benefits are more significant than the other product and that they have been achieved in the last five years.

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Requirement 3: Labeling schemes

An environmental label is a sustainability label that indicates the environmental benefits of a product, process or trader. An environmental labeling scheme is essentially a certification process that guarantees that a product, a process or a trader complies with the requirements for an environmental label. The EU commission will create and maintain a list of approved environmental labels that are allowed to be used in the EU. 

An environmental labeling scheme must comply with the following requirements:

• Information about the ownership and decision-making of the scheme must be clear, publicly available, free, easy to understand, and detailed.
• Information about the objectives, requirements and the process of monitoring compliance must be clear, publicly available, free, easy to understand, and detailed.
• Requirements to join a labeling scheme should be in proportion to the size and turnover of the company, in order to not exclude SME’s.
• The requirements of the scheme has to be developed by experts and reviewed by a heterogeneous group of stakeholders.
• The existence of a complaint and resolution mechanism.
• Procedures and consequences in case of non-compliance are established.

Requirement 4: Verification claims and labels

Traders must regularly review and update the evidence supporting their environmental claims. This review should happen at least every five years or whenever there's a change that might affect the accuracy of the claim. 

The verification of claims and labels will be done by an accredited third-party organization and verification must be done by an expert adhering to these criteria:

• Be independent: Have no ties to the product or trader being evaluate.
• Maintain objectivity: Avoid any conflicts of interest that could influence their judgment.
• Act with professional integrity: Conduct verification tasks honestly and impartially, free from any undue influence.
• Possess expertise & have competent staff: Have the necessary knowledge and resources to conduct thorough evaluations.
• Protect confidentiality: Keep all information obtained during the verification process confidential.
• Take full responsibility for subcontractors: Manage and assess the work of any subcontractors involved in the verification process.

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Compliance and penalties

Each EU country must designate at least one ‘’competent authority’’ to enforce the rules of this Directive. Individuals or organizations can then report traders that they believe are breaking the environmental claim rules to the competent authority. Each country must also decide the punishments for breaking the rules. These punishments should be proportionate enough to motivate traders to follow the rules. 

Penalties will include:

• Fines: Taking away the profits made from the wrongdoing, with higher fines for repeat offenders.
• Confiscation of revenue: Taking revenue earned from selling the products involved.
• Bans: Temporarily preventing the company from doing business with the government for up to a year.

Fines will be significant to company size and revenue, so the maximum fine must be at least 4% of the trader's annual revenue in the affected country.

Current status & timeline of the Green Claims Directive

Note that the Directive is currently still in its negotiating phase, meaning that the EU Council and the EU Parliament will still have to agree on the final content. The Council has published their comments in June 2024 and it is now waiting until the new Parliament convenes later this year to further discuss it. 

Considering that the Directive is still in the negotiating phase and that EU countries must implement the requirements in national laws, the current expected enforcement will be around 2027.  

‍Note: This table includes both past and upcoming deadlines. Upcoming dates that are shaded indicate the expected timeline, but these are subject to change. Please refer to EU Parliament resources for any changes.

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