Sustainability is now a priority for both consumers and businesses, but making convincing sustainability claims can be a legal challenge. How do you ensure that your claims are credible and not regarded as greenwashing? Sustainable living and going green are popular, and many companies try to capitalise on this trend. The result: claims that do not reflect reality and that mislead consumers. In such cases, this is referred to as greenwashing.
In March 2023, the European Commission presented a proposal for the Green Claims Directive. This directive aims to combat greenwashing by businesses, particularly in e-commerce. The proposal requires environmental claims, such as “environmentally friendly”, to be based on scientific evidence and to be verifiable. The new rules are intended to strengthen consumer trust and create fair competition in the market.
The EU Unfair Commercial Practices Directive of 2005 already provides consumers with important protection against misleading and aggressive sales practices. This directive enhances consumer confidence by empowering national supervisory authorities to act against, for example, misleading information or manipulative marketing techniques.
The importance of sustainable consumption in our society is growing. Traders respond by presenting their products and services as environmentally friendly or sustainable. While this aligns with the desire of many consumers to make more conscious choices, it also entails risks. Precisely because consumers increasingly focus on sustainability, the risk of deception is rising.
For this reason, the Empowering Consumers Directive (ECD) (Directive (EU) 2024/825 of the European Parliament and of the Council) entered into force on 26 March 2024 and must be implemented by EU Member States by 27 March 2026 at the latest. The directive clearly defines when statements and conduct relating to sustainability and environmental claims constitute unfair commercial practices. Misleading environmental claims, in other words greenwashing, are explicitly designated as unfair commercial practices. The directive is designed to enable consumers to make informed purchasing decisions and to ensure that environmental claims are fair, clear and reliable. This promotes both consumer protection and a level playing field for traders and ultimately stimulates competition in the market for environmentally friendly products.
Alongside the ECD, the proposal for the Green Claims Directive is also being further developed. While the ECD provides a broad framework for consumer protection, the Green Claims Directive focuses specifically on the substantiation and communication of explicit environmental claims. Although this proposal is still in the negotiation phase, the introduction of the ECD already marks an important first step.
European enforcement against misleading sustainability claims
That the European Commission and national consumer authorities are not standing still on this topic is evident from the negotiations that Zalando had to enter into with the Consumer Protection Cooperation Network (CPC). This network, coordinated by the European Commission and led by consumer authorities from Germany, Denmark, Norway and Sweden, has the power to identify irregularities and to take swift and joint action against commercial practices that do not comply with the rules.
In April 2022, even before the ECD entered into force, Zalando was addressed regarding misleading sustainability labels and icons displayed on products on its platform. Following this, Zalando committed to providing clear information to consumers. The icons will no longer be displayed; instead, Zalando will provide clear information about the environmental benefits of products.
Monitoring greenwashing in the Netherlands
That enforcement against greenwashing is also very active in the Netherlands was demonstrated by the judgment against KLM by the Amsterdam District Court on 20 March 2024. Like Zalando, KLM was criticised for misleading environmental claims. The court ruled that several of KLM’s earlier advertising statements were misleading and therefore unlawful. KLM used vague and general environmental claims and, in other statements, presented an overly positive picture of its measures. These measures have only a limited positive effect, while the impression was created that flying with KLM is sustainable.
These developments underline that companies must strictly comply with the relevant regulations, such as the ECD and the proposed Green Claims Directive. Although a sustainability claim can be made quickly, carefully substantiating such a claim requires specialist expertise. With the introduction of new legislation and the tightening of enforcement measures, the rules of the game are clear: claims must be properly substantiated, transparent and verifiable evidence is required, and misleading information will be robustly challenged. A substantiated claim is no longer an optional addition to attractive environmental promises. Companies must be able to firmly support their environmental claims going forward.
What does this mean in practice for businesses? In the following sections, we discuss the expected changes in marketing and media strategies around sustainable consumption, and the essential rules for companies: what is allowed, what is not, and how deception can be avoided.
Sustainability claims in B2C communications
For companies, it is important to have a clear understanding of when sustainability claims may be regarded as misleading and how to prevent this. The authorities responsible for assessing environmental claims currently take a critical stance towards such statements. It is therefore essential to carefully review claims in advance against the applicable laws and regulations.
Based on the guidelines of the Dutch Authority for Consumers and Markets (ACM) (2023), recent guidance, and lessons from recent case law and forthcoming legislative changes, it is possible for companies to make sustainability claims that are legally sound, build trust and contribute to a sustainable market.
The rules for sustainability claims
In 2023, the ACM issued rules of thumb to help businesses make sustainability claims that enable consumers to make informed choices without being misled. Since then, however, significant legal developments have taken place that have further tightened the requirements for transparency and substantiation. Taken together, the rules of thumb and these recent legal developments provide a clear framework for making responsible and well-substantiated sustainability claims.
Claims must be factually correct
The first consideration when making sustainability claims is their factual accuracy. A claim is factually correct if it is current and clear.
Due to rapid technological developments, the introduction of new comparable products on the market and changing circumstances, a claim can quickly become outdated and therefore factually incorrect. Claims must therefore be reviewed regularly and, where necessary, updated.
To avoid consumers believing that a product offers more or greater sustainability benefits than is the case, claims must be clear. Always specify explicitly which part of the product or production process the claim relates to. This can be done, for example, using percentages or other measurable data. The judgment of the Amsterdam District Court, in which KLM was criticised for its misleading “carbon-neutral flying” claim, underlines that specificity and accuracy are essential.
Substantiate claims with facts
Always ensure that claims are supported by reliable, independent and verifiable evidence. This may take the form of a certificate or a Life Cycle Assessment (LCA). Without proper substantiation, a claim is generally unsustainable and therefore misleading. If a company can explain the sustainability claim by reference to the procedure, measurement method or criteria used, the claim can be regarded as properly substantiated.
Make fair comparisons
Exercise restraint when comparing products and linking such comparisons to sustainability claims. Comparative claims can be valuable, provided they are presented fairly and transparently. They offer consumers insight into the sustainability advantages of one product over another.
The risk of deception arises when products that are not genuinely comparable are compared. For example: if a product is compared with a variant that contains more material and therefore appears automatically less sustainable, the comparison is unfair. In such cases, there is no equal basis, making the claim confusing or even misleading.
To be reliable, comparisons must always be made objectively. This means comparing products with a similar function, using a shared method and common assumptions, and basing the comparison on material and verifiable characteristics of the products concerned. Only then is a sustainability claim credible and genuinely informative for consumers.
Future sustainability ambitions
Many companies wish to communicate their sustainability ambitions. It is crucial that such ambitions are concrete, measurable and achievable. Where a company has a measurable plan with concrete actions that clearly indicates what it applies to, for example a single product or the entire organisation, and where implementation has already started or will start in the near future, such sustainability ambitions may be communicated.
The Amsterdam District Court confirmed this principle in the case against KLM. Companies may express their ambitions and advertise them, but it must be clear which investments are being made to realise those ambitions, and which concrete environmental benefits will result.
The ECD also scrutinises so-called forward-looking environmental claims. Climate-related claims about future performance are only permitted if they are supported by clear, objective, publicly accessible and verifiable commitments and targets of the company. These must also be included in a realistic implementation plan explaining how the targets will be achieved, including the resources allocated for that purpose.
Without such substantiation, these claims may be prohibited, as they would then be regarded as misleading.
Visual claims and labels
Finally, there are the many visual claims and labels used by companies to communicate sustainability. The range has become so extensive that consumers can no longer see the wood for the trees. Because of the abundance of labels, consumers often struggle to distinguish which labels are reliable and which are not. This hampers their ability to make informed and genuinely sustainable purchasing decisions.
To avoid deception, it is essential that companies only use labels that are established and monitored by an independent body, and only when all criteria are fully met. Creating a label without external verification entails significant risks. Moreover, the use of such labels, whether independent or not, often creates the impression among consumers that independent verification has taken place. This makes the risk of deception considerable.
Conclusion
In short, sustainability claims play an important role in informing consumers and strengthening their trust. To be credible, however, such claims must meet clear and strict requirements. The ACM Guidelines on Sustainability Claims (2023), recent judgments such as the KLM case (2024), and new EU rules, including the ECD and the Green Claims Directive, make this unequivocally clear: claims must be concrete, verifiable and transparent.
Companies are therefore well advised to avoid vague terminology, make substantiated and fair comparisons, formulate measurable sustainability targets and use reliable labels. Only in this way can they build a credible sustainable image and genuinely safeguard consumer trust.
Do you still have questions after reading this blog? Feel free to contact us for expert and practical advice.
