European Union implements new rules to prohibit greenwashing

The European Union has implemented Directive 2024/825, aimed at combating greenwashing and protecting consumers from misleading environmental claims. The new regulations prohibit the use of generic terms such as ‘eco’, ‘green’, or ‘climate neutral’ unless companies can provide verifiable evidence and third-party certification to support these assertions.

Under the new framework, companies must present auditable data and detailed action plans to back up environmental or social claims. Specifically, ‘climate neutral’ claims based solely on carbon offsets are banned. To ensure transparency, sustainability labels must be based on certification schemes that include independent verification. Failure to comply with these rules can result in significant penalties, potentially reaching 4% of a company's annual turnover.

The directive also addresses product longevity by restricting tactics that encourage premature obsolescence. It introduces measures to help consumers identify durable products, such as a new ‘GARAN label’ for extended guarantees. These changes are intended to reduce information asymmetry in the market and support businesses that invest in genuine sustainable production processes.