EU Directive targets greenwashing with new sustainability rules

A new European Union directive, the ‘Empowering Consumers’ Directive (EmpCo), is set to crack down on deceptive sustainability claims in the marketplace. While the regulation does not ban environmental advertising, it mandates that all such claims must be verifiable and evidence-based.

Germany has already completed the necessary legislative steps to implement the directive through an amendment to the Act Against Unfair Competition (UWG). Although the EU directive entered into force in March 2024, the regulations will become binding for companies starting September 27, 2026.

Non-compliance with these new rules carries significant financial risks, with potential fines reaching up to 4 percent of a company’s annual turnover within an EU member state. The measure aims to prevent companies from using vague or unsubstantiated terms like ‘eco-friendly’ or ‘climate neutral’ to mislead consumers.