What is Green Claims Directive?

What is the Green Claims Directive?

The Green Claims Directive is a proposed EU regulation that would require companies to substantiate voluntary environmental claims using standardized scientific methodologies before communicating them to consumers. Proposed by the European Commission in March 2023, it establishes specific requirements for how environmental claims must be supported, communicated, and verified—creating a binding framework to eliminate unsubstantiated green marketing across the European single market.

Why It Matters

The Green Claims Directive targets a specific gap in the EU's regulatory architecture. While the CSRD governs corporate sustainability reporting and the Empowering Consumers Directive bans the most egregious forms of greenwashing, neither establishes a methodology for substantiating the environmental claims companies make voluntarily about their products and services. The Green Claims Directive fills this gap by requiring scientific evidence before claims reach consumers.

The scale of the problem is significant. The European Commission's 2020 screening of websites found that 42% of environmental claims were potentially false or deceptive. The 2024 follow-up showed marginal improvement—53% of claims still fell short. Product-level claims like "made from recycled materials," "biodegradable," "carbon neutral," and "sustainably sourced" pervade consumer markets with little verification. The Directive aims to create a level playing field where companies making genuine environmental investments aren't undercut by competitors making hollow claims.

For businesses, the Directive introduces a fundamental shift in the burden of proof. Currently, companies can make environmental claims and face scrutiny only if challenged. Under the Directive, substantiation must precede the claim. This means companies need lifecycle assessment capabilities, third-party verification processes, and documented evidence bases before launching environmentally-positioned products or marketing campaigns.

The Directive also targets the proliferation of private environmental labels. The EU market hosts over 230 sustainability labels, many with weak or unverified standards. The Directive would prohibit new private labeling schemes unless they demonstrate added value beyond existing EU and national requirements, and require existing schemes to meet transparency and verification criteria.

How It Works / Key Components

Substantiation methodology requires companies to base environmental claims on a scientific assessment that considers the product's full lifecycle, covers all significant environmental aspects, and uses primary data supplemented by secondary data where necessary. The assessment must identify whether claimed environmental benefits are offset by negative impacts in other areas (avoiding problem-shifting). For example, a product claiming reduced carbon footprint must disclose if its production increases water pollution or generates hazardous waste.

Claim communication standards specify how substantiated claims must be presented to consumers. Claims must be clear about whether they relate to the entire product or specific components, cover the full lifecycle or specific stages, and apply to all the company's activities or specific operations. Comparative claims (e.g., "30% less packaging than competitor X") face additional requirements around fair comparison methodology and equivalent boundaries.

Third-party verification mandates independent review of substantiation assessments before claims are made. Verification bodies must be accredited and independent from the company making the claim. This creates a new compliance infrastructure—companies will need to engage verifiers, share assessment methodologies and data, and obtain verification certificates before publishing environmental claims.

Enforcement and penalties give the Directive teeth. Member states must designate competent authorities to monitor compliance, investigate complaints, and impose sanctions. Proposed penalties include fines of at least 4% of annual turnover, confiscation of revenues from non-compliant products, and temporary exclusion from public procurement and public funding. Consumer organizations and competitors can also bring complaints, creating multiple enforcement channels.

Council Fire's Approach

Council Fire prepares organizations for Green Claims Directive compliance by auditing current environmental claims, assessing substantiation gaps, and building the lifecycle assessment and verification capabilities needed to make credible, compliant claims. We help companies transform their environmental marketing from aspiration-based messaging to evidence-based communication that withstands regulatory and consumer scrutiny.

Frequently Asked Questions

When will the Green Claims Directive take effect?

The European Commission proposed the Directive in March 2023. It is currently in trilogue negotiations between the Commission, Parliament, and Council. Assuming adoption in 2025, member states would have 18–24 months to transpose it into national law, meaning enforcement could begin in 2027–2028. However, the Empowering Consumers Directive—which bans generic green claims and offset-based neutrality claims—applies earlier, with member state transposition required by March 2026.

Does the Directive apply to B2B claims or only B2C?

The proposed Directive focuses primarily on claims directed at consumers (B2C). However, B2B environmental claims increasingly fall under scrutiny through other mechanisms—the CSRD requires substantiation of sustainability claims in corporate reports, and national unfair competition laws can address misleading B2B marketing. Companies should apply substantiation standards consistently across both B2B and B2C communications to manage risk comprehensively.

How does this affect "carbon neutral" product claims?

The Directive, combined with the Empowering Consumers Directive, effectively ends carbon-neutral product claims based on offsetting. Companies can no longer claim a product is "carbon neutral" or "climate neutral" based on purchasing carbon credits to compensate for product lifecycle emissions. Claims must instead be based on actual environmental performance—reduced emissions from materials, manufacturing, transport, and end-of-life management. Residual offset purchases can be disclosed but cannot form the basis of the claim.