Greenwashing: Update on the Green Claims Directive

The European Commission announced the withdrawal of the Green Claims Directive in June 2025. The Commission has since clarified that the Directive has not been formally withdrawn, but significant uncertainty remains as to the future of the environmental claims law. Our ESG team discusses the story of the Green Claims Directive, and outlines what obligations remain for businesses making green claims on products and services.

What you need to know

• The European Commission announced the withdrawal of the proposed Green Claims Directive in late June 2025
• The Commission has since clarified that the Directive is not formally withdrawn, but its future is now uncertain
• Even if the Directive is withdrawn, businesses still need to be aware of the existing legislative framework on environmental claims

The European Commission announced the withdrawal of the proposal for a Green Claims Directive, or ‘GCD’, on 20 June 2025. EU trilogue negotiations were cancelled and media widely reported that the GCD was dead. The Commission, however, has since clarified that the GCD has not been formally withdrawn, but whether it will be adopted remains to be seen. Our ESG team explores the background to this development and explains why businesses still need to be aware of the existing anti-greenwashing legislative framework. They also discuss what comes next for the law on green claims.

Purpose of the GCD

The GCD aims to protect consumers from misleading environmental marketing practices, often known as ‘greenwashing’. According to the European Commission, over half of all green claims made by businesses are vague, misleading, or based on unfounded information.

The GCD aims to ensure that green claims are credible and trustworthy, allowing consumers to make better-informed purchasing decisions. It is intended that the GCD will ultimately boost the sustainability of products and services in the EU. The GCD targets explicit green claims that are made on a voluntary basis and are not currently covered by other EU rules. A key element of the rules is the requirement that evidence provided by companies to substantiate green claims is verified by national accredited third parties.

Current status of the GCD

The European Commission proposed the GCD in March 2023. The European Parliament and Council agreed their positions in 2024, and negotiations on the final text of the draft law started in January 2025. However, negotiations were cancelled on 23 June 2025 following an announcement from the Commission of its intention to withdraw its GCD proposal.

It has been reported that the announcement followed a letter from the European People’s Party (EPP), the largest political group in the European Parliament. The EPP reportedly expressed its general support for rules addressing greenwashing, but felt that the requirements under the GCD were overly burdensome, complex and costly. Their primary concern related to the proposed requirement for third party verification of information substantiating environmental claims. At a time when simplification of administrative burdens is an EU priority, the withdrawal reflects wider political tensions over how far the EU should go in regulating corporate sustainability. Our previous article reported on the recent roll back of other ESG obligations through the EU’s ‘omnibus’ proposal.

Existing anti-greenwashing rules

Regardless of whether the GCD is withdrawn, businesses operating in the EU need to comply with the existing anti-greenwashing legislative framework. Misleading commercial practices rules remain applicable to green claims. These include, for instance, the Unfair Commercial Practices Directive (UCPD) as implemented in Member States. In Ireland, the Consumer Protection Act 2007 prohibits misleading commercial practices, which would include inaccurate or misleading environmental claims.

The Green Transition Directive supplements the UCPD. Adopted in February 2024 and due to apply from 27 September 2026, the Green Transition Directive will introduce specific prohibitions regarding environmental claims. Claims on things like climate neutrality and other ‘eco-friendly’ statements will be banned unless substantiated with evidence. The Green Transition Directive also contains rules on sustainability labels, their recognition by certification schemes, and third party monitoring of future environmental performance claims. At present, the Green Transition Directive remains in place and will not be affected by the withdrawal of the GCD.

Other relevant EU rules include:

• The Ecodesign for Sustainable Products Regulation, which entered into force in 18 July 2024, sets down environmental sustainability requirements for goods. It also establishes a digital product passport to provide information about a product’s environmental footprint.
• Product-specific rules like the Batteries Regulation, which entered into force on 17 August 2023 and requires a ‘battery passport’ to provide information about the battery’s composition and sustainability requirements.

Businesses making environmental claims about goods and services should be aware of the risk of regulatory scrutiny of these claims. It is important to note that environmental claims carry litigation risk, particularly in the context of potential class actions under Ireland’s implementation of the Collective Redress Scheme.

What’s next for the law on green claims?

The Commission’s decision to withdraw its proposal for the GCD was met with significant political backlash and media attention. It has since been reported that the Commission has confirmed that the GCD has not been formally withdrawn. Whether negotiations will continue will depend on whether agreement can be reached on the scope of the GCD, and whether political consensus within the EU institutions can be rebuilt.

Whatever happens to the GCD, businesses making environmental claims about their goods and services sold on the EU market must ensure that they comply with the existing legislative framework applicable to greenwashing and the communication of environmental information. It is also essential that stakeholders continue to prepare for compliance with upcoming obligations.

For expert advice on how environmental, social and governance laws apply to your organisation, contact a member of our ESG team.

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The content of this article is provided for information purposes only and does not constitute legal or other advice.