The EU tightens: Is this the end of greenwashing?

On 17 January 2024, the European Parliament formally endorsed its provisional agreement with the Council on the Greenwashing Directive, which intends to create a harmonized set of rules on sustainability claims applicable to all companies operating in the EU/EEA by amending certain key provisions of the Unfair Commercial Practices Directive. It aims to contribute to the EU’s green transition by empowering consumers to make informed purchases using reliable sustainability information about products and traders.

Once enforced, the directive will ban a series of greenwashing tactics, including generic environmental labels such as 'organic', 'eco-friendly', 'natural', 'biodegradable' or 'climate neutral', which no longer could be used without proof, also many carbon neutrality claims, such as a claim that a product has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions when this is based on the purchase or cancellation of so-called carbon credits (e.g., carbon offsets from forestry-based removal projects). It would also increase the durability of products, as warranty information should be made more visible and a new, common label would indicate products with an extended warranty period. Companies should keep a close eye on the transposition of this Directive, as it will have a significant impact on how they communicate about their sustainability, environmental, and social or ethical efforts. 

The Council is now expected to endorse the provisional agreement after which the directive will be published in the EU Official Journal and enters into force. Following this, Member States will have 24 months to transpose the directive into their national legislation.