Greenwashing is more common than you think. Research shows that 58% of companies worldwide engage in Greenwashing. In North America, this is as high as 72%. In doing so, organizations give the impression of working more sustainably than they actually do.
The reason? Over a third of consumers regularly buy sustainable products. To strengthen their competitive position, some companies respond to this with misleading or exaggerated claims in their marketing.
To counter this, the European Commission has proposed the Green Claims Directive to the European Parliament and the Council of the EU. This directive should ensure that sustainability claims are fair, transparent and verifiable. Find out exactly what the proposal entails and whether the legislation is already in place in this blog.
What is the Green Claims Directive?
The Green Claims Directive (GCD) is a European Commission proposal from March 2023 that imposes stricter rules on companies that use sustainability claims in their communications. The goal? To protect consumers from misleading information and combat greenwashing.
Specifically, this means that companies may only use sustainability claims such as ''100% recyclable'' or ''climate neutral'' if they:
- are scientifically substantiated with objective data, for example by a life cycle analysis;
- have been independently verified before publication by an external party that verifies that the substantiation is correct.
In addition, companies must make the information available transparently, for example through a QR code on the product packaging.
The directive will become part of the broader European sustainability strategy (the EU Green Deal), which also includes legislation such as the CSRD (Corporate Sustainability Reporting Directive) and the Ecodesign for Sustainable Products Regulation (ESPR).
Why did the EU create the Green Claims Directive?
The Green Claims Directive was proposed to the European Parliament and the Council of the EU for three reasons.
Protecting consumers.
Half of consumers say they consider sustainability important, and almost a third regularly buy sustainable products. However, greenwashing makes it difficult to judge whether a product is truly sustainable. The directive therefore requires companies to substantiate their sustainability claims and make them transparent, so that consumers get honest information about the actual sustainability of a product.
Competitive position
Customers, consumers and supply chain partners increasingly demand sustainability as a condition - not only in consumer choices, but also in tenders and business partnerships. The Green Claims Directive ensures that all claims must meet the same requirements. This gives those companies that actually work on sustainability a fair position in the market.
Read also
How do circularity and finance align?
Contribution to Europe's climate and circularity goals
The European Union wants to be completely climate neutral by 2050, emit at least 55% less CO₂ by 2030 and make the transition to a circular economy. Reliable communication about sustainability is important in this regard. The Green Claims Directive makes clear which claims are substantiated and prevents organizations from pretending to be more sustainable than they are. Thus the directive contributes to the joint effort to achieve Europe's climate and circularity goals.
What is the status of the Green Claims Directive?
The Green Claims Directive is not currently in force. In June 2025, it seemed that the European Commission might withdraw the proposal because of the administrative burden on smaller companies. It is now clear that this is not the case: the Commission has confirmed that the directive will remain in place.
However, an important adjustment has been made: micro-enterprises - companies with fewer than 10 employees and an annual turnover or balance sheet total not exceeding €2 million - will be exempt from the obligations.
If you suspect that sustainability claims are misleading - or not fully substantiated - you can file a complaint. This can be done, for example, with the Authority Consumer & Market ( ACM) via ConsuWijzer or with the Advertising Code Committee (RCC), which assesses complaints about misleading advertising.
Stay informed about the latest updates on laws and regulations?
Follow us on LinkedIn and stay up-to-date.
