The EU Green Claims Directive and what it means for your business

In memory of misleading and ambiguous environmental claims.

• Born: The exact date is unknown, but likely sometime in the 21st century.
• Died: Expected to be laid to rest no later than 2026.

We gather here to bid farewell to green claims that never stood the test of scrutiny. They made us believe that our choices truly mattered—that a product wrapped in a green package with a "carbon-neutral" stamp meant we were making a real difference.

These claims promised a cleaner planet, yet they rarely delivered.

Rest in peace, you cunning deceiver. You were too good (at lying) to us, the customers.

What is the 'Green Claims Directive'?

According to an EU Commission study, a staggering 53% of green claims are vague or misleading.

The investigation also found that 40% of these claims lacked verified data or other supporting evidence. The EU market is also flooded with hundreds of sustainability labels, about half of which have weak or non-existent verification.

The Green Claims Directive aims to combat greenwashing. Beyond compliance, this shift has implications for brand trust, differentiation, and long-term business value.

Green messaging: The fine line between trust and deception

Yes, green claims can be a powerful brand asset. But only when used responsibly.

When companies make vague or misleading claims, they risk more than regulatory penalties. They erode customer trust, weaken their market position, and invite public backlash.

A vague claim can seem harmless, but when exposed as deceptive, it will damage a brand's reputation in the long run. A well-substantiated sustainability message, on the other hand, can strengthen brand equity and foster loyalty.

While this directive primarily aims to protect consumers, B2B brands have just as much to lose—because trust, once broken, isn’t easy to rebuild.

What changes when fluffy environmental claims are buried?

The Green Claims Directive will force companies to make only reliable, verified, and comparable green claims, backed by real consequences if they don’t comply.

It will take effect across EU countries no later than early 2026.

In practice, the directive means:

• Companies* must have their environmental claims verified by an independent, external expert. Claims must be based on reliable scientific evidence and be relevant from a lifecycle perspective.

• General claims like “green,” “eco-friendly,” or “climate-friendly” will only be allowed if the company can prove them with solid evidence.

• Products and services cannot be marketed as “carbon-free,” “climate-neutral,” or “carbon-neutral” if the claim is based on carbon offsetting. This rule does not apply to companies themselves, meaning businesses can still claim to be carbon-neutral—but it’s strongly recommended that they consider more credible alternatives.

• Companies must provide additional traceable information, such as QR codes linking to claim details.

• Instead of creating new, company-specific environmental labels, businesses should primarily use existing EU-approved labels (e.g., EU Ecolabel or the Nordic Swan Ecolabel).

What happens if companies ignore the directive?

Non-compliance comes with hefty penalties, similar to those we see with non-compliance with GDPR:

• Companies may face fines of at least 4% of their annual turnover.

• They risk being banned from public tenders.

• And, of course, reputational damage is guaranteed.

*Small businesses with a turnover below €2 million and fewer than 10 employees are exempt from the claim validation requirement.

How should companies communicate moving forward?

The directive guides companies to communicate climate and environmental actions that have a genuine impact and, among other things, ensures that broad claims, such as "environmentally friendly," must be supported by solid scientific and verifiable evidence.

Since carbon neutrality claims for products and services can no longer be based on carbon offsetting, companies can instead communicate how they plan to reduce their carbon footprint or how much they have already managed to cut emissions. Reducing emissions should be the primary means of lowering a carbon footprint.

Companies can still purchase carbon credits, provided they ensure that these credits deliver real climate benefits. Investing in high-quality climate projects remains highly recommended, as it enhances a company’s positive climate impact.

A company may continue to claim carbon neutrality. However, a better approach would be to communicate the specific climate actions it has undertaken or supported. Carbon neutrality claims have often led companies to purchase cheap, low-quality carbon credits, resulting in emission reductions that exist mainly on paper.

When a company invests in genuinely impactful climate projects, it may not be able to claim to be carbon-free, but its actions will have a real climate impact—something worth communicating to stakeholders.

Good vs. bad green claims – examples

Let me take a couple of concrete examples to illustrate what good and bad green claims look like.

Bad example #1 - Being vague & misleading

A major financial institution promoted its commitment to a greener future while continuing to invest billions in fossil fuels.

Its advertisements highlighted climate-friendly initiatives but failed to mention its extensive financing of carbon-heavy industries, including thermal coal mining.

• Why it’s misleading: The bank selectively showcased its sustainability efforts while omitting its significant contributions to the climate crisis.

• Likely result: The ads were eventually banned by the Advertising Standards Authority after public complaints, and this happened before the Green Claims Directive even came into effect. The backlash may have damaged the bank’s credibility and reinforced skepticism toward corporate green claims.

Bad example #2 - Being vague & exaggerate impact

A B2B Tech company claims: “We have planted 20,000 trees, among other things, and our product is now fully emission-free.”

• Why it’s misleading: The claim of "fully emission-free" lacks transparency and verification, and while tree planting can be seen as positive climate action, it comes with significant uncertainties when used as a carbon offset. The climate impact takes decades to materialize, so companies cannot claim to be climate-neutral in the present. Moreover, factors like deforestation or wildfires could destroy the planted trees, preventing the expected carbon sequestration from ever taking place. There's also a risk of double-counting, where multiple entities take credit for the same carbon reduction.

• Likely result: Skepticism from stakeholders and potential regulatory scrutiny.

Good example #1 - Being transparent & substantiated

A cloud infrastructure provider claims: “We have reduced our data centers’ energy consumption by 40% over the past three years, powered by 100% renewable electricity.”

• Why it works: It provides specific, measurable data and highlights a direct climate impact.

• The likely result is enhanced brand perception as a climate-conscious and responsible industry leader, making the company a preferred choice for environmentally aware clients.

Good example #2 - Adopt radical transparency & accountability

For this last example, I wanted to put forward and credit not a B2B tech but a commercial real estate company, as their attitude towards transparency and accountability is quite inspiring.

Ylva openly admits that their operations contribute to emissions and while the company is working to reduce their impact, they are still part of the problem: “You have to take the good with the bad. We compiled our key irresponsible actions into a reportable form, so anyone can judge our list of sins.”

• Why it works: Instead of greenwashing, the company takes a brutally honest approach, acknowledging its shortcomings while outlining clear, measurable steps for improvement. This builds authenticity and trust while positioning the company as a responsible industry leader.

• The likely result is increased stakeholder credibility and a stronger long-term reputation as a company that genuinely cares about sustainability rather than one that hides behind vague claims.

Stick to the truth and grow from it

Though such regulations can sometimes be perceived as growth bottlenecks, the Green Claims Directive is more of an opportunity than a threat.

It’s a chance to stand out with real sustainability actions, rather than relying on tree-planting PR stunts or stock photos of happy people in sunlit meadows.

In the end, companies that take genuine responsibility will win customer trust and build brand equity, while greenwashing will finally be put to rest. And that’s a future worth investing in.