How the EU is Tackling Misleading Environmental Claims
More than half of green claims provide unclear, deceptive or unsubstantiated details, as stated by the European Commission. The proposed Green Claims Directive aimed to tackle the issue of greenwashing, with negotiations beginning in January.
However, the European Commission unpredictably declared the withdrawal of this proposal, clarifying later that the inclusion of 30 million micro-enterprises within the directive's reach was the reason for this move.
Ulrike Sapiro, Chief Sustainability Officer at Henkel, reflected on LinkedIn: “The ‘anti-green’ movement seems to successfully topple a European law that would forbid the rampant ‘greening-claiming’ of products.
"Or maybe it was just an institutional accident? As with the tale of the CSRD-CSDDD-Taxonomy omnibus, we need better regulation not no regulation. One thing is sure: a permanent legislation yo-yo is burning more resources than it tries to save.”
Understanding the Green Claims Directive
Adopted in 2024, the Directive on Empowering Consumers for the Green Transition prohibited generic environmental claims unless supported by acknowledged evidence.
The Green Claims Directive was established to further define explicit environmental claims, making them “clear and easy to understand.”
The scrutiny over the Green Claims Directive intensified due to issues surrounding the Omnibus Simplification Package, which aimed to amend sustainability regulations like the CSRD.
On 20 June, reports emerged that the centre-right European People’s Party had sent a letter expressing their desire for the law's removal.
Andreas Rasche, Professor and Associate Dean at Copenhagen Business School, commented on LinkedIn, stating: "Such a withdrawal is very unusual, but the Commission has the right of initiative and hence can use it also to withdraw proposals for legislation. Fighting greenwashing will become more difficult with this withdrawal."
Influence of the Omnibus Package
The Omnibus Package introduced in February aimed to “simplify” regulations including the CSRD and CSDDD.
Ursula von der Leyen, President of the European Commission, announced: “Simplification promised, simplification delivered.”
Meanwhile, Collège des Directeurs du Développement Durable (C3D) urged the European Commission in an open letter to provide companies with resources and guidance to maintain competitiveness.
Various significant corporations such as Unilever, Nestlé, Mars, Primark, DP World and Signify opposed revisiting adopted legal texts for renegotiation.
Nicholas Mazzei, Vice President for Sustainability at DP World, emphasised: "What we in the business world want is clear implementation guidance from the commission and not the reopening of adopted legal texts for renegotiation."
This highlights the need for precise guidelines from the European Commission to support the implementation of CSDDD.
The background of the Omnibus Package
In 2024, the Draghi Report outlined ways for the European Union to increase its competitiveness and identified prevailing obstacles.
It stated: “Innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations. As a result, many European entrepreneurs prefer to seek financing from US venture capitalists and scale up in the US market.”
The EU Competitiveness Compass seeks to rectify these issues by streamlining regulations within the union.
Since December 2024, over 90 organisations from civil society, businesses and financial sectors have urged the EU to enhance the execution of CSRD standards while maintaining their strength.
As Ursula von der Leyen remarked: "The content of the laws is good, we want to maintain it and we will maintain it. But the way we get there, the questions we’re asking, the data points we’re collecting is too much, often redundant and often overlapping."
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