Uncertainty Persists On The Future Of The Green Claims Directive

In March 2023, the European Commission (Commission) detailed a proposal for a green claims directive (GCD Proposal), which intended to impose minimum requirements on companies who voluntarily make environmental claims about products or services (for further detail see our two part series on Greenwashing here and here).

However, on 20 June 2025, the Commission announced the withdrawal of the GCD Proposal and uncertainly remains as to its future status.

The GCD Proposal

The GCD Proposal was intended to deal with the issue of greenwashing, a practice which includes the overstating of a company's environmental record, misrepresenting the sustainability of its corporate practices or claiming a product as environmentally friendly without any verifiable evidence.

The GCD Proposal focused on the principles of:

• Substantiation: claims would need to be based on scientific evidence, with any offsets reported in a transparent manner.
• Communication: claims would have to be accompanied by information relating to the substantiation of the claim, with obligations in relation to environmental labels and environmental labelling schemes.
• Verification: Member States would be responsible for setting up verification and enforcement processes to be performed by independent and accredited verifiers.

GCD Proposal Halted

On 18 June 2025, the European People's Party, the largest political group in the European Parliament (Parliament), called for the withdrawal of the proposal, citing concerns that:

"it risked unduly hindering sustainability communication through procedures that are overly complex, administratively burdensome, and costly"

Proposed trilogue negotiations between the Parliament, Commission and Council of the EU to finalise the GCD Proposal were cancelled, and the Commission announced the withdrawal of the proposal on 20 June 2025.

Where does this leave the GCD Proposal?

The position on the current status of the GCD Proposal is unclear. While it initially appeared that it had been shelved entirely, it was subsequently clarified by the Commission that it has not been formally withdrawn. However, there has been no clarity in the interim period on what the next steps might be or what form any revision to the GCD Proposal might take.

It does appear, however, that if the GCD Proposal is to move forward, it will be necessary to address concerns that the administrative complexity and costs would be overly burdensome, particularly in respect of micro-enterprises (fewer than 10 employees and turnover or balance sheet below €2 million) and that it could have the unintended consequence of disincentivising businesses from communicating with consumers at all in respect of the sustainability of products and services in order to avoid GCD obligations.

Green Transition Directive

Even in the absence of any progress on the GCD Proposal, businesses will need to ensure compliance with another EU directive, which is due to be transposed by Member States by September 2026. The Green Transition Directive creates a harmonised set of rules on non-mandatory environmental claims made to consumers by companies operating in the EU. It will amend key provisions of the Unfair Commercial Practices Directive and Consumer Rights Directive.

Under this directive:

• A claim will be considered misleading if it contains false information or is likely to deceive a consumer on the environmental or social characteristics of a product.
• Claims regarding future environmental performance will be misleading if they do not contain clear, objective and verifiable commitments, with measurable targets.
• Prohibited practices will include the display of sustainable labels without the required substantiation and environmental claims that relate to an entire product or business when it actually concerns only a specific aspect of the product or business.

Conclusion

Given the uncertainty that persists on the future of the GCD Proposal, it remains unclear if these developments form part of a wider trend to simplify EU rules. It also remains to be seen if any revived negotiations on the GCD Proposal can result in agreement and if so, whether the scope of the obligations will be altered significantly. In the meantime, in scope businesses will need to prepare for the implementation of the Green Transition Directive next year.

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