Search
Contact
Symbolbild zur Green Claims Directive: Straße im Wald
06.10.2025 | KPMG Law Insights

What the Green Claims Directive means for companies – an overview

With the Green Claims Directive, the EU will introduce extensive regulations on the requirements for permissible environmental claims. The aim is to prevent greenwashing so that consumers can trust information about the environmental impact of products in future. The aim is to ensure that consumers in the EU consciously choose more sustainable products in future and thus actively contribute to environmental protection. In March 2024, the EU Parliament adopted the draft directive, which is now entering the trilogue phase. The Green Claims Directive is expected to come into force in 2027.

In order to appeal to environmentally conscious people, manufacturers label their products as “sustainable”, “recyclable” or “climate neutral” and advertise with claims such as “packaging made from 30% recycled plastic” or “halving the CO2 emissions associated with this product compared to 2020”. Companies have not yet had to substantiate such environmental claims.

In a 2020 study, the EU found that the majority of environmental claims are vague, misleading or unfounded:

The EU Commission wants to change this situation in order to provide consumers with the certainty and transparency they need to turn to sustainable products in a more targeted manner.

This is regulated by the draft Green Claims Directive

According to the draft Green Claims Directive, companies must provide consumers with evidence of voluntary environmental claims. The draft sets out clear criteria for how companies must prove their environmental claims and labels. Environmental claims must also be verified by an independent and accredited verification body before publication. The draft directive also contains rules on ecolabels to ensure that they are reliable.

 

Which companies are affected by the Green Claims Directive?

The draft Green Claims Directive regulates the business relationship between companies and consumers, i.e. B2C transactions. In principle, it should apply to all companies operating in the EU. Small and medium-sized enterprises are also covered by the draft Green Claims Directive. However, some exemptions or simplifications are provided for them.

 

The draft directive sets out these requirements for environmental claims

The draft directive stipulates that companies must base voluntary environmental claims to consumers on scientific evidence. This includes claims about goods, services or the company itself that claim positive environmental impacts and that are not currently covered by other EU regulations.

Example of environmental claims within the meaning of the Green Claims Directive

The directive introduces accredited, mandatory testing bodies that independently certify environmental claims and ecolabels in advance before companies are allowed to use them in communication with customers. If the requirements are met, the testing body issues a certificate of conformity that is recognized throughout the EU.

 

Process of communicating environmental claims in accordance with the Green Claims Directive

 

When does the Green Claims Directive apply?

The EU Commission presented the proposal for the directive back in March 2023. Around a year later, the EU Parliament adopted the draft at first reading; the Council has not yet given its approval, but in June 2024 it adopted its general approach to the proposed directive. Trilogue negotiations between the Council, Commission and Parliament began in January 2025. If the directive is adopted, the member states will probably have two years to transpose it into national law before the new requirements become binding one year later.

 

What are the consequences of non-compliance?

The draft directive provides for fines in the event of non-compliance. The member states will have to determine the details. The type and level of sanctions will depend on the nature and severity of the infringement and whether it is intentional or repeated. The economic benefit for the company can also be taken into account. In any case, companies are at risk of reputational damage, as the proceedings are regularly reported in the press. Consumers, environmental, nature and consumer protection organizations and other companies can report unauthorized environmental claims to the competent authority.

 

The EmpCo Directive

Environmental advertising is also regulated in the EmpCo Directive (Empowering consumers for the green transition), the directive on empowering consumers for the green transition through better protection against unfair practices and better information. The EmpCo Directive was also adopted by the EU as part of the Green Deal. It amends the UCP Directive on Unfair Commercial Practices and was published on March 6, 2024. The member states must implement the necessary measures by September 27, 2026. In Germany, the new rules will be implemented in the UWG. The EmpCo Directive prohibits certain environmental advertising per se. For example, companies are generally not allowed to advertise climate neutrality if climate neutrality is only based on offsetting measures. The Green Claims Directive is lex specialis compared to the EmpCo Directive.

 

Case law already prohibits certain environmental advertising claims

Even before the adoption and implementation of the Green Claims Directive, companies should refrain from making misleading advertising claims. The German Federal Court of Justice (BGH) applies strict standards to environmental advertising. In its ruling of June 27, 2024 (case reference: I ZR 98/23), it decided that advertising is misleading if it is not explained whether the advertised climate neutrality is achieved through actual CO2 savings or through offsetting.

 

Green Hushing is not the solution

For fear of sanctions, financial damage and loss of reputation, companies tend to stop communicating about sustainability issues. They simply remain silent about the measures they are taking in the interests of sustainability. This concealment of measures to promote environmental protection is known as “green hustling“. However, studies show that sustainability measures increase company value and brand value. If companies no longer talk about sustainability measures, they forgo this opportunity to increase value.

 

 

 

Explore #more

15.10.2026 | KPMG Law Insights

Faster Building Permits – Legal Options for Businesses

Planning and permitting procedures do not always have to delay construction projects. The law provides several options for expediting the process. To take advantage of…

09.10.2026 | KPMG Law Insights

Claims Management for Cyber Incidents: How Insurers Actively Manage Claims

Cyber incidents are among the most complex claims scenarios for insurers. Ransomware attacks, in particular, can paralyze entire IT infrastructures—with enormous financial consequences. Insurers for …

08.10.2026 | In the media

KPMG Law Guest Column in AUTOHAUS: Consumer Credit Directive: Sales Under New Circumstances

Car dealerships should use the time remaining before the new Consumer Credit Directive takes effect to systematically review their financing and sales processes for regulatory…

08.10.2026 | In the media

KPMG Law Interview with HAUFE: Even If AI Makes a Mistake, the Board of Directors Is Still Liable

AI analyzes, makes recommendations, and helps make decisions. But who bears the consequences if it’s wrong? KPMG Law experts Nikolaus Vincent Manthey and Sabrina Riesenbeck…

30.09.2026 | KPMG Law Insights

Mixed-Use Real Estate as an Opportunity for Downtown Areas

Downtown areas should be vibrant, sustainable, and attractive. But the traditional business model behind them—retail—is becoming less and less viable. Rents are high, customers are…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Rohde & Schwarz on the acquisitions of NEOSAT and PHYTRONIC

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised the Munich-based technology group Rohde & Schwarz on its acquisitions of NEOSAT GmbH…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Diehl Defence on the acquisition of the Dr. Carls aerial imagery database

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Diehl Defence on its acquisition of the aerial imagery database Dr. Carls GmbH.…

26.09.2026 | In the media

Op-Ed in *Lebensmittelzeitung*: PPWR Introduces New Requirements for the Food Industry

The EU Packaging Regulation (PPWR) has been in effect since August 12, 2026—and presents companies in the food industry with a question that requires urgent…

18.09.2026 | Press releases

KPMG Law Honored at the PMN Management Awards

KPMG Law was awarded first place in the Business Development category at this year’s PMN Management Awards. In addition, the project “The Agent-Based Law Firm”…

18.09.2026 | KPMG Law Insights

How the Data Act Affects the Drafting of Lease Agreements

The EU Data Act is also of great significance to the real estate industry, as modern commercial properties have become data spaces. Heating and air…

Contact

Dr. Manuela Meyer

Senior Manager

Heidestraße 58
10557 Berlin

Tel.: +49 30 530199 109
manuelameyer1@kpmg-law.com

© 2026 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll