European regulations tighten rules on sustainability claims

New European regulations are set to tighten rules regarding sustainability claims to protect consumers from greenwashing. Starting September 27, 2026, financial institutions will face stricter requirements to ensure that environmental and social claims are demonstrably substantiated rather than merely appealing.

In the Netherlands, the Implementation Act for the Directive on Better Sustainability Information for Consumers will provide the Dutch Authority for Consumers and Markets (ACM) and the Dutch Authority for the Financial Markets (AFM) with more specific tools for enforcement. While principles such as factual correctness and specificity remain, certain types of broad environmental claims will be explicitly regulated or prohibited.

To mitigate risks, businesses are encouraged to align sustainability targets with financial performance. This involves conducting materiality assessments through a financial lens, ensuring targets support growth strategies, and measuring the impact intensity of profits to demonstrate how sustainability initiatives contribute to long-term value.