The Fate of the Green Claims Directive Remains Unclear – but the Risks of Greenwashing Are Not
29 June 2025
Last week the European Commission formally announced its intention to withdraw the Green Claims Directive (GCD) proposal — a key component of the EU’s anti-greenwashing framework. However, conflicting statements since then underscore the uncertainty surrounding whether the withdrawal will become final, or if a revised version of the proposed directive may still emerge. As of today, the third and final trilogue negotiation has been cancelled, but no formal termination has been confirmed.
In spite of this climate of uncertainty, it is worth emphasizing that even without a finalized directive, the core principles of the GCD remain highly relevant, reflecting best practices based on the rising expectations of both regulators and consumers. The underlying demand for reliable, evidence-based environmental communication stands unchanged.
It has therefore been our standing recommendation to clients to be cognizant of the GCD’s core principles, as a matter of wise risk management strategy and elimination of potential legal liabilities stemming from both regulatory and public exposures.
General consumer protection laws, while not specifically focused on environmental claims, can still apply to cases of greenwashing, and enforcement actions have been taken in this context, such as the recent fine imposed on Deutsche Bank–owned asset manager DWS. Civil and class action lawsuits related to greenwashing have also resulted in successful outcomes, including a recent case in Germany against Adidas and another against Lufthansa. In this era of increasing scrutiny around greenwashing, adhering to the core principles of the GCD can help businesses strengthen consumer trust and reduce both legal and reputational risk.
Despite the backtracking on the GCD itself, there is a growing trend of national legislative initiatives targeting greenwashing. A recent example is Canada, which earlier this month amended its Competition Act to include new provisions on greenwashing and published a guidance on environmental claims to support businesses in compliance with the new provisions. This guidance echoes many of the GCD’s key principles – including robust substantiation, clear language, and full transparency.
This equally holds true for claims relating to corporate scope 3 decarbonization declarations and carbon offsetting and carbon credit retirement strategies.
Bottom line: Political winds may shift, but legal exposure and reputational risk remain. The cost of greenwashing is simply too high to gamble on legislative uncertainty.
Additional resources can be found here –
Green Claims Directive Status >> click here
Canadian Competition Act >> click here
Canadian Green Claims Guide >> click here
