Directive to empower consumers for the green transition (“Empowering Consumers Directive”) has been published

Directive (EU) 2024/825 as regards empowering consumers for the green transition through better protection against unfair practices and through better information (“Empowering Consumers Directive”) was published in the Official Journal of the European Union on 6 March 2024 and will enter into force on 26 March 2024. The Directive sets the 27 September 2026 as the date on which member states must apply the new rules.

The Directive will, inter alia, bring significant changes to environmental and social advertising.

1. Scope of the Directive

The Empowering Consumers Directive will, inter alia, amend the Unfair Commercial Practices Directive, which has been implemented into national law in the EU member states.

It will primarily apply in the B2C (Business-To-Consumer) context. However, we see relevance for B2B (Business-To-Business) as well: Some member states apply the rules on B2C advertising to B2B as well, although granting the business-customers a higher degree of attention. Furthermore, if the B2B customer plans to resell B2C, they might expect that they can repeat any claims which the initial business-seller made.

The Directive and its amendments do not apply to any message which is mandatory under EU or national law. This may be good news for corporate reports, as these are often mandatory publications. However, it has to be noted that some of the reports go beyond the mandatory reporting obligations and therefore may insofar be considered voluntary.

2. Prohibition on Generic Environmental Claims

Most notably, the Directive will set a high bar for the use of so-called “generic environmental claims”. The Directive presents examples of generic claims in a non-exhaustive list. The list includes:

‘environmentally friendly’, ‘eco-friendly’, ‘green’, ‘nature’s friend’, ‘ecological’, ‘environmentally correct’, ‘climate friendly’, ‘gentle on the environment’, ‘carbon friendly’, ‘energy efficient’, ‘biodegradable’, ‘biobased’

However, whether or not the use of these terms is considered generic depends on the context: If sufficient explanation is provided jointly with the claim, it may be considered non-generic (and as such fall under the yet to be adopted Green Claims Directive). This leaves room for much discussion, and we assume that it will require several court decisions to receive some clarity on the distinction.

If a claim is found to be generic, it will require “excellent recognised environmental performance”, relevant to the claim, meaning

environmental performance compliant with Regulation (EC) No 66/2010 of the European Parliament and of the Council or with national or regional EN ISO 14024 type I ecolabelling schemes officially recognised in the Member States, or top environmental performance in accordance with other applicable Union law;

Only if such excellent recognised environmental performance can be shown and only if it is relevant to the claim, can a generic environmental claim be used.

Last but not least, the Directive continues to explain that businesses should not use generic claims such as ‘conscious’, ‘sustainable’ or ‘responsible’ solely based on “excellent recognised environmental performance”, as such claims also relate to other characteristics, such as social characteristics.

3. Sustainability Labels

The use of sustainability labels will become much stricter. Sustainability label means

any voluntary trust mark, quality mark or equivalent, either public or private, that aims to set apart and promote a product, a process or a business by reference to its environmental or social characteristics, or both, and excludes any mandatory label required under Union or national law.

This fairly broad definition, which will likely see some litigation to define its scope, covers many icons and labels that are currently being used to promote environmental or social characteristics.

Whether it is a leaf, a tree or a green seal: Their use will either require that they are established by public authorities or that they are based on a “certification scheme”. The latter is of most interest, as it is the only option for private labels.

A certification scheme is, inter alia, a third-party verification scheme, in which the label user, the label owner and the label verifier are three independent parties. The scheme must be open under transparent and fair terms to all, and the scheme must be developed in consultation with relevant experts and stakeholders.

In short: If a private company is currently operating their own label, they might have to cease use of the label by 2026 or open it up to all competitors and transfer ownership to an independent party. However, we will have to see how these provisions will be implemented into national laws to assess their impact on existent private labels on a per country basis.

4. Future Environmental Performance

Any claim about future environmental performance (“by 2030 we will be…”) of a product, service, program, or brand will:

• require clear, objective, publicly available and verifiable commitments
• be set out in a detailed and realistic implementation plan that includes measurable and time-bound targets and other relevant elements necessary to support its implementation, such as budgetary resources, technological developments, allocation of resource and
• that is regularly monitored by an independent third party expert (with experience and competence in environmental issues), whose findings shall be made available to consumers.

This change will impact the communication about goals and ambitions and will require concrete plans, steps and a published monitoring.

5. Claims based on Greenhouse Gas Emission Offsets

It will be prohibited to claim, based on greenhouse gas emissions offsetting, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions. Examples of such claims are ‘climate neutral’, ‘CO2 neutral certified’, ‘carbon positive’, ‘climate net zero’, ‘climate compensated’, ‘reduced climate impact’, ‘limited CO2 footprint’. This change will be an obstacle for many companies aiming for a globally aligned advertising, as many other countries still allow neutrality advertising based on offsetting.

6. Advertising mandatory requirements as a distinctive feature

Presenting a mandatory requirement imposed by law as a distinctive feature of the offer will be prohibited. While some member states apply this rule already, it gains significance in view of other upcoming ESG-related laws. The Ecodesign for Sustainable Products Regulation, for example, will grant the EU the power to implement rules on how products have to be made (e.g. how much recycled content a product should contain). If a certain amount of recycled content becomes mandatory, it cannot be advertised as a feature anymore. Of course, any positive step beyond the mandatory requirements can be advertised.

7. Claims should only relate to the relevant aspects

It will be prohibited to make an environmental claim about the entire product or the entire business when the claim or environmental improvement actually only concerns a certain aspect of the product or a specific activity of the business.

8. Commercial communication regarding circularity aspects of products

The Directive also addresses commercial communications and other information provided to consumers in relation to circularity aspects of products, such as their durability, reparability or recyclability. In this respect, among the other bans and obligations introduced by the Directive, withholding information in relation to a product containing a feature introduced to limit its durability will be prohibited, when such information is available to the trader. Also, it will be prohibited to, inter alia, falsely claim that a product allows repair or that, under normal conditions of use, has a certain durability as well as withhold certain information about software updates and consumables.

This Directive is – next to the Green Claims Directive – the EU’s first step towards a much stricter law on green advertising. While the implementation into national law by 2026 may still be some time away, it should be considered now for any product, message or marketing that may still be on the market at that time.