EU Empowering Consumers Directive: An Overarching Ban on Generic Green Claims

The new year began with another display of the EU’s commitment to integrating sustainability into consumer policy. Restricting the use of vague environmental claims in commercial communications within the Union, the EU Empowering Consumers to Green Transition Directive (ECGT) was approved by the European Parliament on January 17th.

As the ECGT will change the rules of the game for EU companies across the board, we called on our experts to prepare an in-depth analysis of the new law. Below you will find not only an outline of the requirements and prohibitions introduced by the ECGT but also strategic recommendations on how and when to act to lessen their impact on your business. So be sure to bookmark this page to share with your marketing team, and keep on reading.

Want someone with deep experience and connections in the EU to help guide your sustainability strategy? Get in touch!

What is the EU Empowering Consumers Directive?

The Empowering Consumers for the Green Transition Directive, or simply the Empowering Consumers Directive, is a legislative proposal developed by the EU Commission with the goals of protecting European consumers’ interests and promoting sustainable consumption. The directive is, in fact, an update of the already existing EU Unfair Commercial Practices Directive (UCPD) and Consumer Rights Directive (CRD).

The ECGT is an integral part of what we at Ohana call the EU Communications Framework, which is a collection of legislative initiatives that will transform how companies trading in the EU communicate with consumers about sustainability. The framework also includes the Ecodesign for Sustainable Products Regulation, the Green Claims Directive and the Textile Labelling Regulation, all of which increase transparency requirements for European businesses.

By setting rules on generic sustainability claims, the EGCT complements the other pieces within the framework and should help in eliminating greenwashing from the single market, advancing the Union’s green transition.

Empowering Consumers Directive vs. Green Claims Directive

While both legislative pieces target the issue of misleading sustainability claims, there is a fundamental difference in scope between the EGCT and the EU Green Claims Directive (GCD), which is important to note.

The Empowering Consumers Directive covers all generic environmental claims, which refer to any environmental claim made in written form or orally, including through audiovisual media, not contained in a sustainability label, where the specification of the claim is not provided in clear and prominent terms on the same medium. This includes claims such as “this product is eco-friendly”.

In contrast to ECGT, the GCD, which is currently in the legislative pipeline, will deal strictly with specific environmental claims (e.g., our product is made of 70% biodegradable materials; 100% of the energy used to produce this packaging comes from renewable sources).

Expected to come into force in 2028, the Green Claims Directive is a key piece of legislation which every EU player should keep an eye on. Its rules should include a strict verification process, by which every green claim will need to be substantiated with sufficient scientific data and formally approved by Member State authorities.

New Requirements Established by the ECGT

The amendments introduced by the ECGT to the Unfair Commercial Practices Directive and the Consumer Rights Directive, create the following requirements and prohibitions for EU traders:

Generic statements – ECGT prohibits the use of generic statements (e.g., ‘eco-friendly’, ‘green’, ‘nature’s friend’, ‘ecological’, ‘gentle on the environment’, ‘energy efficient’, ‘biodegradable’), unless such statements are based on a proven excellent environmental performance. Proven excellent environmental performance can be demonstrated, for example, by complying with the EU Ecolabel Regulation.

Vague terms – ECGT prohibits the use of the terms ‘conscious’, ‘sustainable’ and ‘responsible’ under any circumstances, as these are considered to be too vague.

Claim specificity – Prohibits claims made about the entire product when the real impact is only at a product component level, as well as claims about product aspects which are required by EU law.

Private Green labels – Prohibits the display of sustainability labels which are not based on a certification scheme or not established by public authorities.

Carbon-offsetting claims – Prohibits claims referring to greenhouse gas emission offsetting, such as ‘climate neutral’, ‘carbon positive’, ‘climate net zero’, and ‘limited CO2 footprint’ when they are based on carbon offsetting.

Social claims – “Social washing” will also not be tolerated, and misleading information about the social characteristics of products or traders’ businesses will be treated with similar criteria as environmental claims.

Future performance claims – Claims related to the future environmental performance of a product, service or trader will only be permitted if specific transparency requirements are met. This includes presenting an implementation plan to achieve the targets mentioned in the claim and having the plan’s fulfilment regularly verified by an independent third-party expert.

Certification schemes – All third-party schemes must fulfil a lot of criteria, for instance, the scheme sets out procedures to deal with noncompliance and foresees the withdrawal or suspension in case of non-compliance; monitoring of compliance by the trader must be carried out by a third party independent from both the trader and the scheme owner.

Harmonised notice – Traders should prominently display a so-called harmonised notice alerting consumers about the existence and the main elements of the legal guarantee of conformity. The notice should mention the minimum two-year duration of the guarantee and that the duration might be longer depending on the rules of each Member State.

Eliminating Case-by-case Assessments Within the UCPD

In addition to introducing the requirements outlined above, the ECGT also determines a change in how certain misleading practices should be treated under the Unfair Commercial Practices Directive.

While the original UCPD recommended a case-by-case assessment for the conducts below, the updated text implements a blanket prohibition on:

• False origin claims (e.g., making it seem like a product has been made in a certain country);
• Comparing the product to an alternative that is no longer available on the market;
• Falsely claiming that a product has a certain durability in terms of usage time or intensity, under normal conditions of use;
• Inducing the consumer to replace or replenish the consumables of a product earlier than necessary for technical reasons;
• Making an environmental claim about the entire product or the entire business when it actually concerns only a certain aspect of the product or a specific activity of the trader’s business;
• Presenting requirements imposed by law as a distinctive feature of the trader’s offer.

Implications for European Companies

Although the ECGT indeed limits the types of claims advertisers can make and how they can be displayed, the revision does offer much more clarity on what is permitted and what is not.

In practice, the directive pushes companies to replace generic sustainability claims with specific and well-substantiated statements, and that is a movement which European businesses should not delay.

The pressure to end greenwashing is quickly escalating in the EU, with big brands already being sanctioned by European consumer authorities for misleading claims. This pressure is also evident in the high penalties expected under upcoming legislation. The Green Claims Directive proposal, for example, states a maximum fine of “at least 4% of the trader’s annual turnover in the Member State concerned”.

Legislative Timeline and Recommendations for EU Businesses

The trialogue negotiations on the Empowering Consumers Directive were finalised in early November 2023 and the final text approved by the EU Parliament this January. This means that Member States now have 30 months to apply the provisions in their territories and that it should start being enforced by Q3 2026.

As always, proactivity is the key to softening the impacts of the legislative changes on the horizon, so our advice for EU traders is to immediately begin reviewing their communications based on the existing UCPD guidelines and the UCPD revision.The EU Commission is expected to publish new guidelines on the compliance with the revised UCPD, however the exact date of their publication is not known yet.

Once the Green Claims Directive and Ecodesign for Sustainable Products Regulation delegated acts are finalised, which is expected in 2024-2025, we recommend another review of online and in-store communications, ideally involving your legal, marketing and sustainability reporting teams.

Finally, those looking to stay ahead of the curve should also mobilise their supply chain and traceability teams to begin the critical task of gathering data to substantiate any social and environmental claims.

Want someone with deep experience and connections in the EU to help guide your sustainability strategy? Get in touch!

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