The European Union has introduced stricter rules targeting misleading environmental marketing, increasing the compliance risks for businesses making sustainability claims. The new requirements aim to improve transparency and ensure that environmental claims presented to consumers are clear, credible and supported by evidence.

The rules are part of the EU’s Empowering Consumers for the Green Transition Directive, which began applying on 27 September 2026. They strengthen consumer protection by addressing misleading environmental claims, unsupported sustainability labels and certain climate-related marketing practices.

Businesses using broad terms such as “green,” “eco-friendly” or “environmentally friendly” must ensure their claims meet the applicable requirements. Generic environmental claims can be prohibited when they cannot be substantiated in accordance with the directive. Sustainability labels must also be based on qualifying certification schemes or established by public authorities.

The rules also address climate-neutrality claims based on carbon offsetting. Businesses cannot claim that a product has a neutral, reduced or positive environmental impact in terms of greenhouse gas emissions solely because emissions have been offset.

Financial penalties are an important part of the enforcement framework. Under the EU’s consumer-protection rules, maximum fines for certain widespread, cross-border infringements must reach at least 4% of a trader’s annual turnover in the Member State or Member States concerned. Depending on the applicable enforcement framework, the circumstances of the infringement and national implementation, penalties may be higher. This is not an automatic fine for every greenwashing violation.

The changes have implications for product packaging, advertising, websites, sustainability labels and other consumer-facing communications. Businesses should review their environmental claims, verify supporting evidence and ensure that marketing materials accurately reflect the environmental performance of their products and services.

The new requirements mark a further step in the EU’s efforts to combat greenwashing and strengthen consumer confidence in sustainability information. For businesses, clear, evidence-based environmental communication is increasingly important for regulatory compliance and maintaining consumer trust.