Green Claims Directive: What It Means for Your ESG, Marketing, and Compliance Teams
- Gasilov Group Editorial Team
- Aug 7
- 7 min read
By mid-2025, the EU’s Green Claims Directive is no longer just a policy proposal. It is enforceable, and its implications are cutting across sectors, from FMCG to apparel to logistics. If your business markets products within the EU and uses any environmental claims on packaging, in advertising, or digital content, this directive applies.
The Green Claims Directive requires companies to back any voluntary green claim with scientific evidence, verified through independent accreditation. Claims like “climate neutral,” “eco-friendly,” or “biodegradable” can no longer be vague or unsubstantiated. Companies must provide consumers with clear, comparable, and accurate information, available at the point of sale. This is not an optional disclosure regime. It is a compliance requirement backed by penalties, including potential bans on product sales within the EU.
What’s Actually Changing
While corporate sustainability has been under increasing scrutiny for years, this directive formalises it into enforceable law. Companies will need to:
Substantiate environmental claims with robust life cycle assessments (LCAs)
Use recognised methodologies like the Product Environmental Footprint (PEF)
Secure third-party verification before publishing green claims
Disclose full context and trade-offs of any claim (for example, if a “plastic-free” package increases water use)
This regulation is not isolated. It intersects with broader EU initiatives like the Digital Product Passport (DPP), the Ecodesign for Sustainable Products Regulation (ESPR), and the Corporate Sustainability Reporting Directive (CSRD).
In our experience, we’ve found that environmental claims often fail under scrutiny when internal data silos prevent access to life cycle data, or when marketing teams run ahead of compliance.
Real Examples of Regulatory Pushback
In 2022, the UK’s Advertising Standards Authority (ASA) ruled that Tesco’s advertising for its Plant Chef range, which claimed the products were “better for the planet,” was misleading. The ASA found the claim too broad and lacking sufficient evidence based on a full life cycle assessment. Tesco was required to withdraw the ads and avoid making similar claims without adequate substantiation.
In a broader sweep in 2020, the European Commission and national consumer protection authorities examined 344 online sustainability claims and found that in 59 percent of cases, the claims were not supported by easily accessible evidence and in 57.5 percent, authorities determined there was insufficient information to judge accuracy. These findings informed the development of the Green Claims Directive, proposed by the Commission in March 2023, aiming to ensure that environmental claims are verifiable, transparent, and backed by scientific evidence.
Companies such as H&M have faced legal and regulatory challenges in both the Netherlands and the United States over the environmental claims made for their “Conscious Collection.” In the Netherlands, the Netherlands Authority for Consumers and Markets (ACM) determined that terms like “Conscious” and “Conscious Choice” were unclear and insufficiently substantiated, prompting H&M to remove such labels, pledge clearer communication, and support sustainability initiatives with a donation of €500,000. In the U.S., a proposed class‑action lawsuit accused H&M of overstating the environmental benefits of the line, though the case was dismissed in May 2023 for jurisdictional and pleading deficiencies, leaving its substantive claims unruled.
The Disclosure Burden Will Fall Hardest on Marketing and Legal Teams
The complexity lies in the implementation. Environmental claims are often developed in marketing, yet substantiation requires technical LCA models, third-party verification, and legal sign-off. Without integration between sustainability, legal, and communications teams, these claims are high-risk.
In mid‑2023, Nestlé announced it was moving away from using carbon offsets to label certain brands as “carbon neutral”, including well‑known products like KitKat, Perrier, and others. Instead, the company pledged to invest directly in emissions reduction programs across its supply chain and operations, emphasizing that this would be more effective in helping it reach net‑zero goals.
A major friction point is likely to be Scope 3 emissions, which are often the least reliable and yet the most influential in consumer-facing claims. In many cases, companies use proxy data or industry averages, which may not meet the directive’s thresholds for substantiation.
In our client engagements, we’ve seen marketing teams unintentionally create liability by referencing offsets or packaging changes without understanding the underlying emission profiles or regulatory definitions.
Strategic Takeaways for Leaders
Conduct a claims audit. Map all public-facing environmental claims across your marketing, product, and digital content. Identify any that lack third-party verification or use generic terms.
Build internal alignment. Ensure legal, sustainability, and communications teams collaborate before any green claim is published. This should be a formalised governance step, not a courtesy check.
Prioritise product categories with high exposure. Focus your compliance and verification efforts on product lines with the most aggressive green claims or highest consumer visibility.
Upgrade your LCA capabilities. Many firms still use static LCAs or third-party PDFs from years ago. EU regulators now expect granular, auditable life cycle data, aligned with evolving standards like PEFCRs.
But even the best strategy hits limits without clarity on how regulators will interpret edge cases. That’s where targeted advisory support becomes essential.
Compliance Is the Floor. Competitive Advantage Is Built on Trust.
For many firms, the Green Claims Directive may feel like a regulatory hurdle. But for others, it is a strategic opening. Those who can credibly demonstrate environmental performance without overpromising will gain consumer trust while de-risking compliance.
According to Brand Finance’s Global Brand Equity Monitor, European consumers are 25 percent less likely to believe that a brand is environmentally sustainable and 26 percent less likely to trust social sustainability claims compared to consumers globally. Brands with independently verified sustainability credentials are better positioned to earn trust in this skeptical market.
Best-in-Class Examples: Verification as a Differentiator
Decathlon, the French sporting goods retailer, has adopted the European Commission’s Product Environmental Footprint (PEF) methodology to assess the environmental impact of its products across 16 categories, including carbon emissions, water usage, and toxicity. By embedding this science-based life cycle analysis into product design and development, Decathlon demonstrates leadership in transparent, verifiable sustainability metrics. While the scores are not yet consistently displayed on packaging or in-store, this internal system positions the company ahead of anticipated EU green claims regulations and strengthens its differentiation in a competitive market.
GANNI, the Danish apparel brand, phased out the use of virgin leather in 2023, a material with a high carbon footprint. It also enhanced its tracking of detailed supply chain emissions data, particularly in transportation and materials. These actions reflect GANNI’s commitment to credibility and science-based climate action rather than relying on marketing labels or offsets.
Where Many Will Fail: Partial Claims Without Trade-Off Disclosure
The Directive specifically targets misleading partial claims. For instance, a product advertised as “recyclable” must clarify under what conditions the recycling occurs and whether infrastructure exists for consumers to act on it. Simply stating “recyclable” without context can now be considered a breach.
Take the example of bottled water brands using “100 percent recyclable” messaging—in reality, the system doesn’t support that claim. A joint report by ClientEarth, ECOS, consulting firm Eunomia, and Zero Waste Europe highlights that in the EU, only around 50 percent of plastic bottles are actually recycled, and just about 30 percent are remade into new bottles.
Looking Ahead: What Business Leaders Should Prioritise
Investment in traceability tools. QR codes and digital product passports can help disclose real-time data and evidence for claims. This transparency is becoming a market expectation.
Scenario planning for grey-area claims. Phrases like “net-zero,” “carbon compensated,” or “green packaging” often sit in regulatory limbo. Companies should prepare now by identifying claims that may need to be reworded, justified, or withdrawn entirely.
Training for non-sustainability teams. Legal, communications, and product marketing staff must understand the evolving definition of a green claim, the evidence required, and the reputational risk of misalignment.
In our experience, we’ve found that risk often escalates when regional marketing teams operate autonomously without visibility into local compliance requirements. A centralised yet agile governance model is essential.
Why This Moment Matters
Greenwashing is no longer just a PR risk. It is becoming a compliance liability, and in some cases, a barrier to market access. With the EU setting the bar, we expect similar policy moves in other jurisdictions—particularly Australia and Canada, where consumer protection agencies are already stepping up green claim enforcement.
As enforcement ramps up in 2025 and beyond, early movers will benefit not only from compliance readiness but also from brand credibility. Those who wait for legal notices may find themselves pulled into reactive strategy and rushed disclosures.
Closing Thought
There is a growing gap between the volume of environmental messaging and the integrity behind it. The Green Claims Directive is designed to close that gap. For business leaders, the choice is clear. Either elevate the rigor behind your claims now or prepare for forced course corrections later.
Our firm advises clients globally on ESG strategy, product claims verification, and regulatory alignment. If your teams are navigating uncertainty around environmental messaging, product substantiation, or LCA integration, we can help.
Written by: Gasilov Group Editorial Team
Reviewed by: Rafael Rzayev, Partner – ESG Policy & Economic Sustainability
Frequently Asked Questions (FAQ): Green Claims Directive:
What is the Green Claims Directive and who does it apply to?
The Green Claims Directive is an EU regulation requiring companies to substantiate voluntary environmental claims on products using scientific evidence and independent verification. It applies to any business marketing products in the EU, regardless of where they are headquartered.
Which types of green claims are most at risk under the new rules?
Generic claims like “eco-friendly,” “carbon neutral,” or “recyclable” are particularly risky if they are not backed by verifiable evidence and contextual details. Claims relying on carbon offsets without transparent accounting are also under scrutiny.
How do companies prove their green claims?
Claims must be supported by a life cycle assessment or equivalent scientific analysis, often using the EU’s Product Environmental Footprint methodology. Third-party verification is mandatory before any claim is published.
What are the penalties for non-compliance?
Penalties may include product delisting, fines, or public naming by regulators. Member states will define specific enforcement measures, but the directive sets a minimum bar for action against misleading claims.
How can companies prepare for compliance?
Start with a green claims audit, centralise your verification processes, upgrade LCA capabilities, and establish cross-functional governance to ensure all claims are legally and scientifically defensible.
