New EU directive against greenwashing
An opportunity for genuine sustainability communication
The EU is taking another step towards transparent sustainability communication. With the Green Claims Directive, it is establishing binding standards for the first time on how companies must formulate and substantiate environmental claims. But what does this mean in concrete terms – and how can companies prepare for it?
Why the directive is coming – and why it makes sense
In recent years, public interest in sustainability has grown. Companies are responding with numerous environmental promises, ranging from ‘climate neutral’ to “recycled” to ‘environmentally friendly.’ But these statements are not always well-founded – it often remains unclear what they are based on. The EU Commission found in a study that over 40% of all ‘green claims’ were unsubstantiated or misleading.
Against this backdrop, the Green Claims Directive (GCD) was proposed in March 2023. It is part of the European Green Deal and supplements existing consumer protection regulations. Its aim is to prevent greenwashing, protect consumers and create a level playing field – especially for companies that are seriously and credibly committed to sustainability.
The draft directive is currently in trilogue between the Parliament, the Council and the Commission. It is expected to come into force in 2025. Companies would be well advised to take action now, as the requirements are comprehensive.
What the Green Claims Directive requires
The directive applies to all explicit environmental claims used in corporate communications – i.e. statements such as ‘climate neutral’, ‘CO2-compensated’, “biodegradable” or even ‘natural’. It is crucial that such statements are substantiated, verifiable and transparent.
What companies will have to provide in future
- Scientifically sound evidence, ideally according to internationally recognised standards
- Life cycle perspective: it is not enough to highlight individual process steps – the entire ecological footprint of the product must be considered
- Clarity and accuracy: vague or ambiguous statements are not permitted
- Transparency regarding data sources and methods, publicly accessible
- Clear separation between reduction measures and compensation
- When using CO2 certificates: Proof that they are used exclusively for residual emissions and that they are of high quality
In addition, companies must disclose whether a claim applies to the entire product or only to part of it – and whether it concerns the company as a whole or only a specific activity.
Focus on promises for the future and environmental labels
Statements about future environmental performance – such as ‘We will be climate neutral by 2030’ – will also be strictly regulated. They must:
- be based on a scientifically sound target path
- contain a concrete implementation plan with measurable milestones
- be publicly available and verifiably documented.
Environmental labels will also be subject to clear requirements in future. These relate to:
- Transparency in the governance of label providers
- Scientifically sound and relevant criteria
- Independent verification and clear procedures for infringements
Labels that assign products a blanket environmental rating (e.g. in the form of a score) will no longer be permitted, unless they are directly validated by the EU.
CO2 offsetting: strictly regulated, but not prohibited
Statements such as ‘climate neutral through offsetting’ are a particularly sensitive area. The Green Claims Directive makes it clear that climate neutrality through offsetting alone is no longer legally permissible as a claim if no reduction measures of one's own can be demonstrated.
Any offsetting may only be carried out for residual emissions that are demonstrably unavoidable. The certificates used must be transparently documented, of high quality and communicated separately from the actual emissions balance. CO2 offsetting is therefore not prohibited – but it is de-emotionalised and demystified.
The directive also distinguishes between two types of climate statements:
- Contribution claims: A company actively contributes to climate protection (e.g. through project support).
- Offset claims: The company offsets a portion of its emissions through compensation.
Offset claims in particular must have a net-zero target, including a credible reduction pathway and a clear demarcation of the offset emissions.
What companies can expect – and why it pays to be prepared using the example of HUG AG
The requirements of the Green Claims Directive are demanding – they require companies not only to be more transparent, but also to systematically prepare their sustainability strategy and communication methods.
At the same time, however, the directive also presents an opportunity to stand out in the market through credible communication. Those who prepare early can not only counter legal risks, but also strengthen the trust of consumers, investors and employees.
Our collaboration with food manufacturer HUG AG in Malters provides a clear example of how companies are already addressing the directive. Swiss Climate carried out a Green Claims Check for an environmental claim used on products. The claim was checked against the various requirements of the Green Claims Directive and given a rating from 1 to 3 for each point. Based on this, Swiss Climate developed recommendations for action for various time horizons (short, medium and long term) to help HUG further develop its environmental claims and prepare for regulatory requirements in this area.
With this check, HUG is demonstrating that it is addressing the new requirements early and actively. The initiative not only strengthens credibility, but also helps to identify strategic development potential. It is precisely such processes that enable companies to move from reacting to shaping – and put them in the best possible position for a regulatory and communicative future.
‘The pleasant cooperation with Swiss Climate in the area of environmental claims has paid off for us. Thanks to clear recommendations for action and a sharpened understanding of the contents of the Green Claims Directive, we can continue to develop our sustainability communication in a meaningful way.’ - Simone Durrer-Merkle, Sustainability Manager at HUG AG
The Green Claims Directive not only brings new legal requirements, but also methodological and communication challenges. Many companies – even those with advanced sustainability strategies – are asking themselves questions such as:
- Which statements will still be permissible in future?
- How can we substantiate our claims?
- How can we integrate scientifically sound statements into our marketing and ESG reporting?
- And how do we minimise the risk of being accused of greenwashing?
The Green Claims Directive is changing the rules of the game for sustainability communication. What used to be possible with a good story must now be verifiable, traceable and measurable. For companies, this is not only a new obligation – it is above all a great opportunity to differentiate themselves.
Conclusion: Act now – and communicate credibly for the future
Those who get started now can strengthen their brand position, minimise regulatory risks and make their own contribution to the net-zero transformation visible. We are happy to support you on this journey.
Get in touch with us – we will accompany you from the initial assessment to the implementation of credible, compliant environmental communication. You can find more information about our consulting services here: https://www.swissclimate.ch/faktencheck-nachhaltigkeit
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