Green Claims Directive on hold: Much ado about nothing?

August 1, 2025

In June 2025, the EU appeared close to finalising the Green Claims Directive, a binding framework for voluntary environmental claims. However, just before negotiations were due to conclude, the European Commission paused the process.

The trigger: resistance from the conservative European People’s Party (EPP) in the European Parliament, which warned of overregulation, particularly for micro-enterprises with fewer than ten employees, or under €2 million in turnover.

Instead of a final agreement, the draft was sent back for review. Since then, it remains unclear if, and in what form, the directive will move forward.

What is the Green Claims Directive about?

The Green Claims Directive was based on a 2020 study by the European Commission that analysed 150 environmental claims made by companies. The findings were striking: over half of the claims were vague, unsubstantiated, or misleading. Around 40% could not be backed by verifiable data or evidence.

This is where the directive intended to step in.

Going forward, companies would only be permitted to make environmental claims that are clear, verifiable, and backed by evidence so that consumers could rely on terms like “sustainably produced” or “eco-friendly” when making purchasing decisions.

Criticism of the Green Claims Directive draft

The proposed regulations were strict, particularly due to the planned ex-ante verification requirement: before publishing an environmental claim, companies would need to have it validated by an external verifier or certification body. This raised concerns, especially among SMEs, as it implied:

  • Additional administrative burden
  • Unclear responsibilities regarding evidence provision
  • Costs for third-party verification
  • Potential delays in product launches or marketing campaigns

One of the most heavily criticised points was that micro-enterprises would not be exempt. On June 20, 2025, the European Commission decided to suspend the legislative process without formally withdrawing the proposal. The draft has remained on hold ever since, with no timeline for its revival.

No free pass on environmental claims

Even though the Green Claims Directive has been paused, this does not mean that environmental claims can now be made without consequence. Legal frameworks already exist and are becoming more specific.

Act against Unfair Competition (UWG in Germany)

Germany’s Gesetz gegen den unlauteren Wettbewerb, or “UWG”, has governed how companies may advertise for over 125 years. The current version was modernised in 2004 to align with EU requirements.

The current legal standard is clear: environmental and climate-related claims must be substantiated. Terms like “carbon offsetting” or “eco-friendly” must not mislead.

German case law is also becoming more precise. In June 2024, the German Federal Court of Justice ruled that claims lacking transparent information on carbon accounting, emissions reduction strategies, and offsetting can be legally challenged.

Empowering Consumers Directive (EmpCo Directive)

The Empowering Consumers Directive (EU 2024/825, or “EmpCo”) has been in force since March 2024 and complements the Green Claims Directive as part of the EU Green Deal. While the Green Claims Directive focuses on scientific substantiation and third-party verification, EmpCo targets B2C communication and strengthens consumer protection.

Key elements of EmpCo

  • Generic terms like “eco-friendly” or “green” can only be used if substantiated and verifiable
  • Future-oriented claims (e.g. “climate neutral by 2030”) require a credible implementation plan
  • Labels and seals must be independent, transparent, and traceable
  • EU member states must transpose EmpCo into national law by March 2026, becomes binding from September 2026
  • Implementation in the UWG (for Germany)

In July 2025, the German Ministry of Justice published a draft bill to amend the UWG, aiming for a 1:1 integration of the EmpCo requirements into national law:

  • Introduction of the term “environmental claim”
  • Clear rules for permissible and impermissible claims
  • Mandatory evidence and documentation
  • Expanded annex listing unfair commercial practices

This will make EmpCo the practical basis for regulating environmental claims in Germany and significantly clarify legal expectations under the UWG.

What does this mean for your business?

Expectations for environmental communication are rising regardless of the status of the Green Claims Directive. Transparent and credible communication requires substance; all environmental claims must be substantiated.

In practical terms:

  • Review existing claims for clarity, transparency, and verifiable environmental impact
  • Support future targets with concrete evidence, such as published reduction pathways, investment plans, or science-based targets (e.g. SBTi), in which the path is as important as the target itself
  • Structure your documentation, including emission reports, action plans, and evidence of methods and system boundaries
  • Secure your communications from both a legal and content perspective: rely on clear processes, verifiable data, and honest reporting of actual impacts
  • Use only compliant labels, i.e. environmental labels based on transparent, independent certification systems that meet legal requirements

While the Green Claims Directive may be on hold, the legal landscape is evolving, and consumer expectations are growing.

Clear, verifiable claims are becoming important not just for compliance, but for building trust, protecting your brand, and staying competitive. Companies that act now can turn regulatory clarity into a strategic advantage.