3 min read
The Growing Challenge of Greenwashing
As sustainability becomes a key purchasing factor for consumers, businesses are increasingly highlighting their environmental credentials. However, this trend has also led to a rise in greenwashing, where companies make misleading, exaggerated, or unsubstantiated environmental claims and sustainability claims. These practices expose businesses to growing Regulatory risks under evolving EU Greenwashing Rules. According to the European Commission’s Inventory and Reliability Assessment Report on Environmental Claims in the EU, more than half of the assessed green claims were vague, misleading, or lacked sufficient evidence, making it difficult for consumers to distinguish genuine sustainability efforts from marketing tactics.
Why is the EU Taking Action Against Greenwashing?
The European Union is strengthening its Greenwashing Regulations to protect consumers and promote fair competition. Greenwashing not only undermines consumer trust but also disadvantages organizations that invest in legitimate sustainability initiatives. When environmental claims cannot be verified, consumers may make purchasing decisions based on inaccurate information. Recognizing this challenge, the European Union has strengthened its consumer protection framework to improve transparency and ensure that sustainability claims are credible, comparable, and trustworthy. Overall, research cited by the European Commission reveals a troubling landscape where:
- 53% of green claims provide vague, misleading, or unfounded information.
- 40% of claims have no supporting evidence at all.
- There are over 230 different sustainability labels in the EU, often with vastly different levels of transparency, leading to "label fatigue" and confusion
The objective of these EU Greenwashing Rules is to create a level playing field where truly sustainable businesses can compete fairly, and consumers can make informed decisions that contribute to a circular economy.
The Key 2026 Regulatory Update
A major milestone is the implementation of the Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825). EU Member States were required to transpose the directive into national law by March 2026, with the new Greenwashing Regulations taking effect from 27 September 2026. These rules are designed to combat misleading environmental marketing claims and give consumers greater confidence in sustainability-related information.
How Is This Different from Existing Green Claims Rules?
Unlike traditional green claims regulations, which generally prohibit misleading environmental advertising after it has been challenged, the EU's 2026 framework takes a more proactive approach. It specifically targets broad environmental terms, climate-neutrality claims based solely on carbon offsetting, and self-created environmental labeling and sustainability labels that can mislead consumers. The rules also provide greater clarity on what constitutes acceptable evidence, reducing ambiguity for both businesses and regulators. As a result, companies must substantiate environmental marketing claims before communicating them to consumers. This significantly raises the standard for product claims substantiation and sustainability compliance across the European market.
What Will Change for Businesses?
From September 2026, organizations will face stricter requirements when making environmental claims. Generic statements such as “eco-friendly,” “green,” or “environmentally correct” will be prohibited when recognised excellent environmental performance cannot be demonstrated. The rules also prohibit product-level climate neutrality claims based solely on carbon offsets and restrict the use of self-created sustainability labels that lack independent certification.
In addition, businesses must ensure that sustainability-related messaging is clear, accurate, and capable of withstanding Regulatory scrutiny. Environmental marketing claims that exaggerate environmental benefits or imply broader sustainability performance than can be demonstrated may be considered misleading.
For Cosmetic companies, these requirements also reinforce the importance of cosmetic Regulatory compliance and robust product claims substantiation to ensure marketing claims align with applicable regulations.
The Status of the EU Green Claims Directive
While the proposed EU Green Claims Directive, which aimed to introduce more detailed substantiation and verification requirements for green claims, was withdrawn in 2025, the EU’s broader anti-greenwashing agenda remains firmly in place. The Empowering Consumers for the Green Transition Directive continues to provide a strong Regulatory framework for greenwashing and will be the primary driver of compliance requirements from September 2026 onward.
What Businesses Should Do Now
With the deadline approaching, companies operating in the EU should proactively review product labels, green claims, advertising materials, sustainability reports, ESG compliance disclosures, and digital communications. Ensuring that environmental claims are evidence-based and transparent will not only support Regulatory compliance but also strengthen consumer trust and brand credibility. In an increasingly sustainability-conscious marketplace, authenticity is becoming a competitive advantage rather than just a compliance requirement.
As scrutiny around environmental claims continues to increase, businesses must ensure their sustainability messaging is accurate, transparent, and backed by evidence.
Freyr can help organizations navigate evolving EU anti-greenwashing requirements by supporting claim reviews, compliance assessments, and Regulatory monitoring, enabling confident and credible sustainability communications.
With Freyr's Regulatory expertise, businesses can confidently communicate their sustainability initiatives while aligning with evolving EU Greenwashing Rules and maintaining consumer trust.
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