What is the Future of European Greenwashing Rules?

More than half of green claims give vague, misleading or unfounded information according to the European Commission. 

Its proposed Green Claims Directive intends to combat greenwashing and negotiations have been underway since January.

However, the Commission unexpectedly announced plans to withdraw the proposal and later clarified this is due to an amendment that includes 30 million micro-enterprises under the directive’s scope. 

Ulrike Sapiro, Chief Sustainability Officer at Henkel, said on LinkedIn: “The ‘anti-green’ movement seems to successfully topple a European law that would forbid the rampant ‘greening-claiming’ of products. Or maybe it was just an institutional accident?

“As with the tale of the CSRD-CSDDD-Taxonomy omnibus, we need better regulation not no regulation.

“One thing is sure: a permanent legislation yo-yo is burning more resources than it tries to save.”

What is the Green Claims Directive?

The Directive on Empowering Consumers for the Green Transition was adopted in 2024 and banned generic environmental claims without recognised substance to back them up. 

The Green Claims Directive was set to work alongside this by addressing specific requirements for explicit environmental claims to make them “clear and easy to understand”. 

Debates over the Omnibus Simplification Package, aiming to change sustainability regulations like the CSRD, led to scrutiny over the Green Claims Directive. 

On 20 June, the Commission announced it was planning to withdraw the proposal and reports said that the centre-right European People’s Party sent a letter saying it wanted the law gone. 

“Such a withdrawal is very unusual, but the Commission has the right of initiative and hence can use it also to withdraw proposals for legislation,” wrote Andreas Rasche, Professor and Associate Dean at Copenhagen Business School, on LinkedIn.

“Fighting greenwashing will become more difficult with this withdrawal.”

The Omnibus and its impact

The Omnibus package was first published in February, aiming to “simplify” regulations including the CSRD and CSDDD. 

Announcing the changes, Ursula von der Leyen, President of the European Commission, said: “Simplification promised, simplification delivered.”

An open letter by Collège des Directeurs du Développement Durable (C3D), representing more than 400 French companies, asks the European Commission to “support companies with resources and guidance to ensure compliance while maintaining competitiveness”.

Unilever, Nestlé, Mars, Primark, DP World and Signify, among others, signed an open letter that says: "The most practical step the European Commission can take to support future competitiveness is to focus on developing the clear and practical guidance needed to support businesses in implementing the CSDDD".

"We at DP World want the commission not to go back on committed legislation covering supply chain due diligence (CSDDD) and reporting (CSRD)," wrote Nicholas Mazzei, Vice President for Sustainability at DP World, after the publication of an open letter.

"What we in the business world want is clear implementation guidance from the commission, and not the reopening of adopted legal texts for renegotiation."

Behind the Omnibus

In 2024, the Draghi Report detailed ways for the European Union to become more competitive and issues the Union must resolve.

The report reads: “Innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.

“As a result, many European entrepreneurs prefer to seek financing from US venture capitalists and scale up in the US market.”

The EU Competitiveness Compass aims to address the findings of this report through simplifying regulations in the union. 

In December 2024, more than 90 organisations representing civil society, businesses, banks and investors issued a joint statement urging the EU to improve its implementation of CSRD standards whilst maintaining the directive's robustness.

Ursula von der Leyen, President of the European Commission, has said that "the content of the laws is good, we want to maintain it and we will maintain it".

She adds: "But the way we get there, the questions we're asking, the data points we're collecting is too much, often redundant and often overlapping."

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