What's next for green claims in the EU and the UK?

It has been a turbulent few weeks for the future of green claims legislation in the EU after the European Commission announced in June that it intends to withdraw the legislative proposal on green claims.

The Commission has since clarified that the proposed Green Claims Directive (GCD) has not been withdrawn and would only be withdrawn if microenterprises stay in scope of the legislative proposal.

Why does the GCD matter to businesses outside the EU?

The proposed GCD contains new criteria to make sure that environmental labels and claims are accurate so that consumers in the EU can make better informed purchasing decisions. The proposal is said to complement the EU's upcoming Empowering Consumers for the Green Transition Directive. Existing consumer law in the EU, the Unfair Commercial Practices Directive (UCPD), already contains measures to protect consumers from unfair business practices such as untruthful information. The guidance to the UCPD also explains how the UCPD applies to environmental claims. The proposed GCD complements the UCPD but also provides more specific rules to address greenwashing.

UK businesses, which manufacture or supply products into the EU and make green claims or create environmental labelling schemes for use within the EU, need to be taking notice of the GCD.

What is the background to this back and forth?

The legislative proposal for the GCD was published in March 2023 and in December 2024 it reached the stage of trilogue negotiations between the European Commission, the Council of the European Union, and the European Parliament. In other words, the proposal was close to being finalised.

In parallel, in January 2025, the European Commission published the 'Competitiveness Compass for the EU', with decarbonisation being one of the three core areas for action to boost competitiveness of the EU markets. Drastically reducing the regulatory and administrative burden (simplification) featured as one of the five key enablers to drive competitiveness. The communication was crystallised with specific measures into the Commission's annual Work Programme for 2025, including six simplification – Omnibus – packages. Unlike other legislation such as the Corporate Sustainability Due Diligence Directive, the Work Programme did not include GCD in the simplification packages; instead, it simply listed the directive in the pending legislation annexes.

However, a U-turn was reported at the end of June during the final stages of the proposed GCD trilogues: the largest party in the European Parliament requested the Commission to withdraw the GCD as being too complex and burdensome and undermining the simplification efforts. The Commission initially announced its intention to withdraw the proposal and the Council cancelled the planned trilogue talks.

What other upcoming legislation concerns green claims in the EU?

We have previously written about the EU's Empowering Consumers for the Green Transition Directive (ECGTD) and what this legislation means for UK businesses selling or distributing consumer goods into the EU.

The ECGTD relates to sustainability and contains new measures to give consumers in the EU the information and protection they need to make more sustainable purchasing choices. The ECGTD amends the following EU legislation: the Consumer Rights Directive (CRD) and the UCPD. Businesses will need to start complying with the ECGTD from September 2026. 

• The ECGTD will make changes to the CRD to require businesses to provide the consumer with clear and accurate information about the environmental impact of the products and services they buy, including their lifespan, repairability, availability of spare parts, and recyclability. This is intended to help consumers source more durable goods.
• The ECGTD will make changes to the UCPD to protect consumers against misleading green claims. It will add banned practices to the UCPD including making generic environmental claims, such as "eco-friendly" or "energy efficient" without being able to back up the claims.

Other related EU legislation on sustainability, aimed at giving consumers access to more sustainable products, is also in the pipeline. This includes the Right to Repair Directive, which contains new measures to make it easier for consumers to get defective or broken goods repaired. And the Ecodesign for Sustainable Products Regulation, which considers durability, product repair and spare parts at the design stage.

How are green claims enforced in the UK?

In the UK the Competition and Markets Authority (CMA) has published the Green Claims Code. The guidance is intended to make sure that businesses are compliant with consumer protection law when making green claims. The Code makes it clear that businesses must not make claims which create an impression that goods or services are more environmentally friendly than they really are. The Code has 6 key principles including that green claims must be truthful, accurate, clear, substantiated, and consider the full lifecycle of the product. The CMA has also issued a tailored compliance guide, based on the Green Claims Code, to help fashion brands stay on the right side of consumer law regarding their green claims.

The Digital Markets, Competition and Consumers Act 2024 (DMCC) contains an unfair commercial practices regime and a consumer law enforcement regime, both of which came into force on 6 April 2025. As we explained in our recent article, the DMCC provides the CMA with new direct enforcement powers, including the power to issue fines up to £300,000 or 10% of the business' turnover, whichever is higher. The CMA's guidance on unfair commercial practices explains that businesses must not mislead consumers by giving them information which is objectively false. The CMA guidance refers to information about the environmental impact of a product as information which might impact on a consumer's decision. The guidance includes an example of a trader marketing itself as a supplier of 'eco-friendly' fashion products, which will be covered by the unfair commercial practices regime. So, we know that the CMA has the power to enforce its Green Claims Code and that enforcement will be severe.

Added to the above, only this month, Which? published the results of an investigation into how well companies are sticking to the Green Claims Code. Their investigation found that "vague and unsubstantiated green claims have infiltrated the retail market". Which? has revealed that they found many examples of green marketing claims which are confusing or potentially misleading in breach of the Code. Which? suggest that more guidance and support may be needed from regulators. But it also says that businesses must take responsibility for making sure their green claims are clear and accurate.

The Advertising Standards Authority (ASA) and the Committee of Advertising Practice can also take action to make sure that environmental claims in advertising are not misleading or irresponsible. The rules in the Advertising Codes have been updated to reflect the provisions of the DMCCA. Adverts which are found to breach the Advertising Codes can be ordered to be taken down and there is adverse publicity associated with an ASA ruling, which is made public.

So, the message for retail businesses, and others, is that promoting the sustainability and green credentials of products and services is highly regulated in the UK. Businesses must comply with the DMCCA and CMA guidance, the Green Claims Code, and the Advertising Codes to avoid enforcement actions.

Do you want to know more about how EU legislation concerning sustainability might impact on your contracts and your trading relationships in Europe? Or more about the DMCC and how the CMA will enforce green claims in the UK?

Simply reach out to Sarah Daun or Ashley Borthwick.