Beyond Greenwashing: Navigating the EU Directive on Green Claims

Guest post by: Sophie Amodio, Associate Director Team Leader for Communications & Engagement at South Pole

On 27 September, the Directive on Empowering Consumers for the Green Transition – or in short, the EmpCo Directive – comes into force impacting all companies that operate within the EU. Long overdue, the directive aims to rebuild consumer trust by ensuring all green claims are supported by evidence. Following a prolonged era of greenwashing, it levels the playing field by restoring integrity back into green claims, allowing only companies that make a genuine investment in sustainability to rise on top.

The directive – which predominantly impacts fast-moving consumer goods, retail, fashion and consumer tech – introduces an outright ban on generic unsubstantiated terms like “eco-friendly”, carbon-neutrality claims based exclusively on external offsets, and uncertified private sustainability labels. It also mandates that future performance targets be backed by resourced implementation plans and independent third-party audits.

As the consumer-facing arm of the European Green Deal, the directive works alongside other regulations including the Corporate Sustainability Reporting Directive (CSRD). The regulations mark a shift towards a more compliant marketing model where sustainability narratives must be supported by evidence. Failure to comply risks severe regulatory penalties – up to 4% of a company’s annual turnover – marketing bans, and reputational damage.

Originally coined in the 1980s, greenwashing has seen a surge in the last decade. A 2020 study by the European Commission found that 53.5% of examined environmental claims in the EU were found to be vague, misleading or unfounded, while 40% were unsubstantiated. For EU companies, the repeat offender rate for engaging in greenwashing stood at 39% in 2024, 9% higher than the global average.

Most notably, we’ve seen insincere sustainable fashion claims, false low-emissions/ carbon neutrality claims from airlines, unverifiable carbon footprint claims from a food brand, and misleading climate ads from several banks. When every product/service claims to be “eco”, “green”, or “planet-friendly”, the terms lose all value, leaving consumers confused and brands operating with true environmental rigor without a competitive edge.

For many businesses, the biggest challenge in meeting the directive is operational. EmpCo cuts across several teams – sustainability, legal, compliance, supply chain and marketing – yet there is often no single owner responsible for connecting these functions. As a result, companies may have the necessary data to comply with the directive but struggle to link it to the right claims or translate it to a consumer audience.

This difficulty arises partly because compliance with the directive isn’t simply a “yes” or “no” exercise – it’s about substantiating the claim with supply chain data, lifecycle analysis, clear definitions, and a careful presentation. Meeting such requirements will depend on the business but will require investment – both time and money. Some may only need to update digital e-commerce copy which is a relatively quick and easy task, whereas some may have to completely redesign physical packaging. Some may need to invest in getting the infrastructure in place to find the data needed while others may need to onboard an external legal or consultancy, covering their fees.

For unprepared companies, the looming 27 September deadline may see a rise in greenhushing – a trend where companies remain silent or underreport genuine sustainability efforts to avoid scrutiny. As found previously by South Pole, 44% of 1,400 surveyed businesses find communicating net zero more difficult than before, with a lack of clarity and changing regulation being the reason. While this may be the result in the short-term as businesses get ready for the directive, over the long term it would undermine both its objective and the significant opportunity that comes with getting it right.

A global 2026 study by Bain & Company found that 85% of consumers are concerned about sustainability, up from 79% last year. This presents a significant business opportunity for organisations that can substantiate their claims and communicate them clearly to the market. Doing so will help rebuild the trust that has been broken in recent years and enable them to differentiate themselves once again in a market that became saturated with “green” initiatives.

As a first step, companies should be conducting a comprehensive diagnostic and gap analysis. In simple terms, look at all consumer-facing touchpoints – reports, websites, product description, catalogues, and corporate commitments – and identify where generic terms like “eco”, “green”, and “sustainable” are being used and therefore will need to either be substantiated or removed.

The next step is to build a robust evidence base. Replace vague assertions with rigorous scientific data and measurable metrics across product life cycles. Execute Life Cycle Assessments (LCAs) and Product Carbon Footprints aligned with international standards (e.g., ISO, GHG Protocol, PACT 3) to build the precise technical background data required to back specific claims.

Once the evidence is in place, pivot brand communications away from broad marketing claims toward product specific disclosures. Clearly explain what has been measured and what the claim covers. Standardised declarations, like the Environmental Product Declarations, can support this.

Finally, develop a future-facing claims strategy. This means embedding permanent workflows, including mandatory legal and compliance sign-off before any new claim goes live. An internal, pre-approved claims library backed by verified data will help marketing teams work more efficiently. Alongside this, roll out continuous capability-building programmes to ensure the various cross-functional teams remain aligned.

Ultimately, the objective for companies is to connect data, evidence and communications through a joined-up operating model. This will help businesses move beyond reactive compliance and use EmpCo as an opportunity to build greater credibility and transparency. It will also unlock new opportunities among consumers who increasingly desire this information to make better choices, giving organisations that do it well a significant competitive advantage.