Addressing greenwashing through the EmpCo Directive

In an age where sustainability is more critical than ever, the Directive (EU) 2024/825 as regards empowering consumers for the green transition through better protection against unfair practices and through better information (“EmpCo Directive”) is a pivotal piece of legislation aimed at enhancing the protection of consumers across the European Union (“EU”) by addressing the issue of greenwashing. The EmpCo Directive has entered into force on 26 March 2024.

Scope

Together with the Green Claims Directive, the EmpCo Directive is part of the EU’s broader ‘Green Deal’ strategy to create uniform standards relating to environmental claims and labels. 

Unlike the Green Claims Directive, the EmpCo Directive does not create a new regulatory regime for unfair practices, but amends the existing Unfair Commercial Practices Directive (“UCPD”) and the Consumer Rights Directive (“CRD”). “The EmpCo Directive will be relevant for all companies that market products in the EU, regardless of their size and place of establishment. It will also primarily apply in the B2C context.” 

As such, the EmpCo Directive introduces significant changes for consumers, allowing them to benefit from increased protection against deceptive business practices, As a result, consumers will be better equipped to make informed purchasing decisions. Businesses will also be required to meet higher standards, and must provide clear, relevant, and reliable information.

Timeline 

The implementation timeline of the EmpCo Directive marks two key dates. By 26 March 2026, all Member States must incorporate the EmpCo Directive into their national law. The actual enforcement of the new rules must officially start on 27 September 2026. 

Amendments to the UCPD

The EmpCo Directive amends the UCPD to specifically address greenwashing and other unfair commercial practices that could negatively affect sustainability efforts.

First, new practices have been added to the blacklist in Annex 1 of the UCPD. These new practices are prohibited in all cases. For example, generic environmental claims are prohibited unless they are properly substantiated by demonstrating recognized excellent environmental performance in accordance with EU law (e.g., claims such as ‘environmentally friendly’, ‘eco-friendly’, ‘green’, ‘nature’s friend’, etc.). It is also prohibited to display a sustainability label unless it is based on a certification scheme or has been established by public authorities.

Secondly, changes are introduced relating to practices that must be evaluated on a case-by-case basis to be considered misleading and therefore prohibited. For example, the main features of a product that cannot be misleading now explicitly include environmental or social characteristics (e.g., respect of human rights, gender equality, etc.) or circularity aspects (such as durability, reparability and recyclability). Another example which may be considered misleading is advertising benefits to consumers that are irrelevant and not directly related to any feature of that specific product or business (e.g., claiming that a particular brand of bottled water is gluten-free). 

“As a consequence, companies will have to invest considerable effort to maintain their commercial practices.” 

Amendments to the CRD

The EmpCo Directive also amends the CRD to promote environmentally friendly consumer choices. Traders must provide clear and reliable information on legal warranties and commercial durability guarantees. It also includes mandatory pre-contractual information on repairability, spare parts, manuals, software updates and provisions for distance contracts.

Relationship with the Green Claims Directive

The EU Commission officially introduced the Green Claims Directive on 22 March 2023. 

The Green Claims Directive complements the EmpCo Directive by setting out specific requirements for the substantiation and communication of environmental claims, and rules to harmonize the requirements of environmental labels. 

However, the Green Claims Directive is currently still under negotiation and the timeline for reaching a final agreement remains uncertain. Once a final agreement is reached, the EmpCo Directive will have to be read together with the Green Claims Directive. Recently, the EU Commission announced its intention to withdraw the Green Claims Directive as there was strong opposition from the European People’s Party, expressing their overall support for the rules against greenwashing yet finding it costly, complex and burdensome. Nevertheless, the Commission clarified that there is no formal withdrawal. The spokesperson reported that the Commission only intended to withdraw the proposal if microenterprises remained within its scope. Thus, only the future will tell if and how the negotiations will proceed and if the Green Claims Directive will be adopted after all.