We have written on several occasions about the problems that arise from the desire of many companies to appear “better” and “greener” than they actually are. The Empowering Consumers Directive defines environmental claims clearly for the first time and brings them within the rules on unfair commercial practices. The European Union is introducing new requirements for companies to curb “greenwashing” (greenwashing) in advertising — the practice of a company creating the impression, or misleading consumers, that its products, services or operations are environmentally friendly. The European Union is taking a far tougher line against misleading advertising, substantially restricting unsubstantiated environmental claims and requiring companies to be more transparent in their communication with consumers.

The new rules stipulate that any claim about a product's or service's impact on the environment must be demonstrable and verifiable. This means that the general terms so often used until now, such as “environmentally friendly” or “green”, will be prohibited in future unless they are backed by specific evidence. Claims based solely on carbon emissions offsetting will likewise not be permitted unless complete and verifiable information is provided.

The rules also introduce stricter requirements for sustainability labelling and for comparing products against environmental criteria. Companies will have to ensure that all essential information is clearly available on the product packaging.

The new rules will significantly increase the legal risks for companies. Consumers will have greater scope to challenge misleading advertising, while competitors will be able to bring claims over unfair commercial practices. Joint liability across supply chains is also possible, meaning that several companies may be held responsible at the same time. The number of court cases concerning so-called greenwashing is also expected to rise, and supervisory authorities are set to step up their oversight.