Green Claims Directive: What companies need to know and do now

Sustainable products and services enable companies to position themselves better in the market and gain competitive advantages, whereby they naturally have a legitimate interest in communicating their sustainability activities. However, ‘sustainability’ is often interpreted in different ways, which means that such statements can quickly become misleading or even deceptive to end consumers. Whether it's ‘climate-neutral shipping’, ‘environmentally friendly packaging’ or ‘sustainable production’, environmental claims have long been part of many marketing strategies. But beware: what is well-intentioned can quickly become a legal pitfall.

With the planned Green Claims Directive, the EU wants to create uniform guidelines for the use of environmental claims for advertising purposes and prevent greenwashing. Recent court rulings in Germany show that companies should definitely review their environmental claims.

• What the latest developments are in the field of greenwashing.
• What provisions the new European Green Claims Directive provides for to prevent it.
• What you and your marketing department should pay particular attention to in advertising practices.

Greenwashing in the spotlight: recent rulings as a wake-up call

First, it is worth taking a look at the latest case law. Courts are already cracking down on companies that use misleading environmental claims in their advertising – and this does not only apply to large corporations!

1. BGH: Advertising using the term ‘climate neutral’ only permissible with explanation
   In June 2024, the Federal Court of Justice (Bundesgerichtshof, BGH) ruled that the term ‘climate neutral’ is not permitted in advertising without a specific explanation. A manufacturer that relied exclusively on CO₂ offsetting was convicted of misleading advertising (BGH, judgment of 27 June 2024 - I ZR 98/2).
2. Adidas ruling: Climate neutrality targets must be transparent
   In March 2025, the Regional Court (Landgericht, LG) of Nuremberg-Fürth prohibited Adidas from advertising with the goal of becoming ‘climate neutral by 2050’ because the path to achieving this goal was not clearly communicated (LG Nuremberg-Fürth, ruling of 25 March 2025, ref. 3 HK O 6524/24).
3. Fines also for financial service providers
   Greenwashing is becoming expensive even in the financial sector: Deutsche Bank subsidiary DWS was fined €25 million by the Frankfurt public prosecutor's office in 2025 for misleading ESG disclosures (Handelsblatt, Staatsanwaltschaft verhängt Millionenbußgeld gegen DWS, 02.04.2025).
   
   

What do these rulings mean for SMEs and owner-managed businesses?

Even though media attention is mostly focused on large companies, the same principles apply to SMEs: anyone who advertises environmental benefits must make them clear, transparent and verifiable, otherwise they face warnings, fines and damage to their reputation.

EU-wide rules against misleading sustainability claims

A ‘green claim’ is an environmental statement that suggests that a product, service or company is environmentally friendly or less harmful to the environment than others.

The Green Claims Directive is expected to introduce uniform requirements for environmental advertising in the EU from 2026. The aim is to protect consumers from misleading ‘green’ claims and to create a level playing field for competition. A 2020 study by the European Commission found that 53.3% of the environmental claims examined in the EU were vague, misleading or unsubstantiated, and 40% of the claims were completely unsubstantiated.

• Evidence requirement: Every environmental claim (known as a ‘green claim’) must be scientifically substantiated.
• External verification: Green claims must be verified by independent bodies.
• Ban on pseudo-labels: Only certified environmental labels will be permitted.
• Transparency: General statements such as ‘environmentally friendly’ or ‘climate neutral’ will be prohibited in future without further details.
  
  

Negative examples of misleading environmental advertising

Companies are often unaware of the legal risks associated with environmental advertising. Although the statements are not intentionally false, they can still have legal consequences.

• ‘Our product is climate neutral’: no explanation of whether this is achieved through reduction or compensation
• ‘Sustainable packaging’: it is unclear what ‘sustainable’ refers to
• ‘Environmentally friendly shipping’: no information on emissions saved
  
  

Recommendations for SMEs

Even though the Green Claims Directive is not yet in force, SMEs should not wait to take action:

a) Make an inventory of environmental claims
List all your green claims in advertising, on your website, on social media and on packaging.

b) Secure evidence
Back up every statement with clear, up-to-date evidence (e.g. life cycle assessments, product carbon footprints (PCF), certificates).

c) Raise awareness in marketing
Train your teams in the use of terms such as ‘climate neutral’, ‘sustainable’ or ‘environmentally friendly’ and introduce appropriate compliance processes.

d) Use external expertise
Have critical statements checked by sustainability experts – an investment that avoids expensive warnings.

e) Rely on recognised labels
Use established environmental labels such as the EU-Ecolabel or the Blue Angel.

Prove your green claims

Life cycle assessments (LCA) in accordance with ISO 14040/14044 are a key method for providing scientifically sound evidence for green claims. The Green Claims Directive expressly requires that such statements must be based on recognised scientific methods – the LCA is considered an established standard tool in this regard. If your statements relates exclusively to climate protection aspects, the creation of a Product Carbon Footprint in accordance with ISO 14067 may also be a suitable and more efficient alternative.

Would you like to develop effective and credible marketing for your products or demonstrate your environmental efforts and actively use them for advertising purposes? We are happy to support you – from training to verification and practical implementation. Feel free to contact our experts for sustainability consulting – we will advise you in a needs-oriented and pragmatic manner.

Text: Olga Schmidt