Jul 8, 2025
Killing the EU Anti-Greenwashing Directive Would Mean More Work for Companies
Last week, the EU Commission expressed their intent to withdraw the Green Claims Directive (also known as the EU’s anti-greenwashing law) if microenterprises were not exempted from its scope. In the weeks leading up to this announcement, the directive has seen vocal pushback from right-wing lawmakers as well as a withdrawal of support from the European People’s Party (EPP).
The Green Claims Directive was first introduced in March of 2023 with the goal of addressing greenwashing by standardizing the requirements to make certain sustainability claims about consumer products, including claims that a product is “climate-neutral”, containing “recycled content” or that a product is “natural”. The proposed directive included minimum requirements for businesses to substantiate and independently verify their green claims before using such phrasing on any customer-facing materials, and obligated companies to make that information available to consumers. The directive also introduced a requirement for existing independent environmental labels to be reliable, transparent, independently verified and reviewed on a regular basis, and any new environmental labels would have required EU approval.
Without any EU-wide legislation standardizing green claims, companies that make green claims about their products may risk multiple fines and/or lawsuits across the countries in which they operate. Greenwashing claims are most often made against companies operating in the energy, food and beverage, consumer goods, aviation, textiles, automotive and financial sectors, and companies across industries have seen lawsuits brought against individual companies. A recent analysis showed a notable increase in environmental, social and government (ESG) litigation across Europe over the last few years, with 81% of these cases ruling in favor of the plaintiffs. The plaintiffs in these cases are typically regulators, competitors, individual consumers, or civil society organizations, and the rate with which these cases rule in favor of the plaintiff is significantly higher in the EU vs in the US or Asia.
In 2024, a ruling by the German Federal Court of Justice stated that “special legal standards, similar to the strict standards which apply to health-related advertising” must apply to environmental claims due to the high value society places on environmental protection and the “emotional relevance the environment has to the target audience, ranging from concern for their own health to a sense of responsibility for future generations. As a result of this ruling, trade associations won a number of greenwashing cases in Germany by arguing that green claims made by certain companies were unclear, unsubstantiated, vague or otherwise misleading.
Other European countries have seen similar greenwashing litigation in recent years. In France, a company’s claim that they were "contributing to [the world’s] preservation” was found to be vague and misleading. In the Netherlands, a claim that a company’s packaging was “100% linked to plant-based materials” was found to be misleading as the packaging also contained an unknown portion of fossil raw materials, and in Norway (a non EU member state), a claim that the environmental impact of a certain t-shirt was reduced in comparison to the production of a conventional cotton t-shirt was found to be misleading on the grounds that the data substantiating this claim was both outdated and inaccurate.
While some of the stakeholder criticism levied against the Green Claims Directive was valid - particularly the fear that this would simply result in “greenhushing” - establishing a criteria for substantiating green claims across Europe would have created a clear standard for companies and lessened their likelihood of experiencing costly litigation to the detriment of their reputations in the industry. Companies operating in numerous countries in Europe may end up subject to separate lawsuits with variations in country-level requirements. And while some companies may just elect to remove such claims from their products in an effort to avoid litigation, this can cause these companies to lose their competitive advantage and ultimately harm both their reputation amongst consumers and their bottom line.
Withdrawing this directive will not only harm consumers who purchase goods with misleading or unsubstantiated claims, but will also increase the risk of litigation for multinational companies. Rather than scrapping the legislation due to political pressure, the EU Commission should reconvene with industry stakeholders to ensure the Green Claims Directive is clear, feasible, nuanced and effective without creating an undue burden on small companies.
At Sourcemap, we believe that consumers have a right to know where products come from and how they impact society and the environment. We also believe that companies deserve standard, automated solutions to map and measure the impact of their operations, including their extended supply chains. To learn more about Sourcemap’s history of helping companies substantiate their green claims through supply chain due diligence, reach out to our team of experts.
