MHC warns businesses on ‘green’ claims
Lawyers at Mason Hayes & Curran (MHC) have warned businesses making ‘green’ claims about products or services that they must still comply with existing EU legislation, despite uncertainty about the future of a directive on the issue.
Late last month, the European Commission announced the withdrawal of the proposal for a Green Claims Directive (GCD) and negotiations on the initiative were cancelled.
The commission, however, has since clarified that the GCD has not been formally withdrawn, but the MHC lawyers say that there is now “significant uncertainty” about its future.
The proposed directive aimed to make product labelling clearer and more trustworthy by banning the use of general environmental claims like ‘environmentally friendly’, ‘natural’, ‘biodegradable’, ‘climate neutral’, or ‘eco’ without proof.
Administrative burdens
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, which felt that the requirements under the GCD were overly burdensome, complex, and costly.
Their main reported concern was related to a 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,” the MHC lawyers say.
“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,” they add.
Existing framework
The firm says that, regardless of whether the GCD is withdrawn, businesses operating in the EU need to comply with the existing anti-greenwashing legislative framework.
It cites the Unfair Commercial Practices Directive (UCPD) as implemented in member states. The firm points out that, in Ireland, the Consumer Protection Act 2007 prohibits misleading commercial practices, which would include inaccurate or misleading environmental claims.
MHC lawyers also note that the Green Transition Directive, due to apply from 27 September 2026, will introduce specific prohibitions on environmental claims.
“Claims on things like climate neutrality and other ‘eco-friendly’ statements will be banned unless substantiated with evidence,” the firm’s lawyers state.
The directive, which remains in place, also contains rules on sustainability labels, their recognition by certification schemes, and third-party monitoring of future environmental-performance claims.
Other relevant EU rules include the Ecodesign for Sustainable Products Regulation, in force from 18 July 2024, which sets down environmental-sustainability requirements for goods, and product-specific rules such as the Batteries Regulation.