A 2020 study by the European Commission showed that at least half the statements companies make about the sustainability of their products is wrong or misleading. Now, the Commission takes the next step: The new Greenwashing Directive aims to put an end to these practices.

The European Commission plans to end greenwashing with a new law on transparency in the sustainability promises of companies. Governmental controls will help to verify claims. This comes after a 2020 study that showed that over half of sustainability and environmental claims in products and services were wrong, vague, or misleading. At the same time, there are many different standards within the EU that make it difficult for companies to comply.

The new law will make it easier for companies to contribute to climate change mitigation and adaptation, while ensuring that their promises have a solid base. With the help of new international standards and scientific back-ups, sustainability claims will be verified by impartial observers. In January 2024, the European Parliament adopted the directive.

A harmonised set of rules

On January 17, 2024, the European Parliament endorsed the Greenwashing Directive with an overwhelming majority. The official name of the law is “Empowering Consumers for the Green Transition through Better Protection against Unfair Practices and Better Information”. Once the EU Council endorses the provisional agreement, the Directive will be published in the EU’s Official Journal and enter into force.

The objective of the Greenwashing Directive is to contribute to the EU’s green transition by empowering consumers to make informed purchases using reliable sustainability information about products and companies. It amends the Directive 2005/29 on Unfair Business-to-Consumer Practices by introducing specific rules on sustainability and environmental claims. By working with the Proposed Green Claims Directive, the Greenwashing Directive will hopefully put an end to unlawful, misleading claims.

For companies, the new law will impact how they can communicate about their sustainability, environmental, and social and ethical efforts. Eventually, there will be a harmonised set of rules on sustainability claims that apply to all companies operating in the EU. They will cover product descriptions, advertising, and communications about services and products. Member States will have 24 months to transpose the Directive into their national legislation once the Greenwashing Directive enters into force.

Banning general environmental claims

Already, national regulators, NGOs, and consumer organisations have started to enforce against greenwashing. In countries such as France, Germany, and the Netherlands, greenwashing – as well as bluewashing, which focuses on economic and community factors –  is already under intense scrutiny.

Once the Greenwashing Directive comes into force, companies will have to be more transparent about emissions and pollutants along the entire life cycle of products. Whenever products include carcinogenic or other dangerous elements, they cannot be marketed as environmentally friendly. The new rules aim to make product labelling clearer and more trustworthy. General environmental claims like “environmentally friendly”, “natural”, “biodegradable”, “climate neutral”, and “eco” will be banned, unless there is proof. The Directive will also regulate the use of sustainability labels on the basis of comparative data. Claims around a neutral, reduced, or positive impact on the environment because of emissions offsetting schemes will also be banned.

Apart from advertising rules, the Greenwashing Directive will also make producers and consumers focus more on the durability of products. Guarantee information will have to be more visible. A new, harmonised label will give more prominence to products with higher durability. Unfounded durability claims that prompt consumers to replace goods earlier than necessary will be banned, as will be the presentation of goods as repairable when they are not.

False claims and outright lies

Greenwashing has been growing ever since sustainability has become more of a mainstream topic. Along with a growing environmental awareness of consumers, marketing has changed. Vague promises in advertisements or on packaging are often greenwashing practices. There are even entire business models based on green promises. For example, Gotbag got negative press for claiming to produce backpacks that consist only of plastic from the ocean. Airup, a start-up, falsely claimed that its water bottles consisted of recycled materials and would save emissions. And Shell received the „golden vulture“ from the German NGO Deutsche Umwelthilfe for outright lying: The company claimed that car drivers could compensate for all their CO2 emissions at 1.1 cent per litre without ever explaining how that would work.

In January 2023, the Deutsche Umwelthilfe warned eight companies because of greenwashing in their advertising, including Hellofresh, Eurowings, Faber-Castell, Netto, Danone, Tyczka Energy and football club 1. FC Köln. They all used terms like “climate neutral” or “CO2 neutral” to advertise products or companies without transparently explaining how they would reach this neutrality.

Read more: In 2021, we looked at Amazon’s Climate Pledge and asked whether it is more than just greenwashing.