The New EU Regulation Forcing Companies to Prove ESG Claims
The short answer: From 27 September 2026, any company selling products or services to consumers in the EU must be able to prove every environmental and sustainability claim it makes. Generic terms like "eco-friendly," "green," or "sustainable" are effectively banned unless backed by recognised certification or verifiable evidence. The regulation driving this change is the Empowering Consumers for the Green Transition Directive (ECGT) — also known as Directive (EU) 2024/825 or EmpCo.
This is not a voluntary framework. It is binding consumer protection law, and it applies regardless of where your company is headquartered. If you market to EU consumers, you are in scope.
Below, you will find what the ECGT requires, how it differs from the Corporate Sustainability Reporting Directive (CSRD), what happened to the separate Green Claims Directive, the penalties for non-compliance, and a practical roadmap for getting ready before the deadline.
The Core Problem: Why "Green" Can No Longer Be Just a Marketing Word
For years, companies have used environmental language as a differentiator. "Climate neutral." "Eco-friendly packaging." "Sustainably sourced." These phrases moved products off shelves and attracted investors.
The evidence suggests many of those claims were not backed by much. A 2020 European Commission study found that 53.3% of green claims examined were vague, misleading, or unfounded, and 40% were entirely unsubstantiated. More recent research cited by compliance analysts suggests that 42% of green claims made in Europe are exaggerated, false, or misleading.
The ECGT is the EU's response to that reality. It does not discourage sustainability communication — it demands that such communication be specific, substantiated, and verifiable. Vague claims are out. Evidence is in.
What the ECGT Directive Actually Requires
The ECGT amends two foundational pieces of EU consumer law: the Unfair Commercial Practices Directive (2005/29/EC) and the Consumer Rights Directive (2011/83/EU). It introduces new prohibitions and expands the list of "blacklisted" commercial practices — practices that are considered unfair in all circumstances, without the need to prove actual consumer harm.
Member states were required to transpose the directive into national law by 27 March 2026. Enforcement begins on 27 September 2026, with no transition period.
The core requirements are as follows:
1. Generic environmental claims are banned without proof
Terms such as "eco-friendly," "green," "sustainable," "climate positive," and "nature-friendly" are prohibited unless the company can demonstrate recognised excellent environmental performance. In practice, this means holding a certification such as the EU Ecolabel, a national EN ISO 14024 Type I scheme (such as Germany's Blue Angel or the Nordic Swan), or achieving maximum performance under applicable EU law (for example, the Energy Labelling Regulation).
A generic claim cannot be fixed with a vague footnote. The specification must be clear and prominent on the same medium where the claim appears — packaging, website, or advertisement. The level of detail is assessed case by case, taking into account the overall impression on the average consumer and the constraints of the medium.
2. Offset-based "carbon neutral" product claims are blacklisted
Claiming that a product is carbon neutral, climate neutral, or has a reduced or positive environmental impact based solely on greenhouse gas offsetting is prohibited. This applies regardless of the quality or certification of the carbon credits purchased. Offsetting cannot be used as the legal basis for a product-level climate claim.
This is a significant shift. Many companies that purchased verified carbon credits and labelled products "carbon neutral" will need to remove those labels or replace them with claims based on actual emissions reductions within their own value chain.
3. Sustainability labels must be independently verified
Self-created sustainability labels — labels that are not based on a recognised certification scheme or established by public authorities — are prohibited. Only labels backed by third-party verification or public governance are permitted.
This targets the proliferation of in-house "green badges" and proprietary sustainability seals that companies created to signal environmental responsibility without external scrutiny.
4. Forward-looking claims require a detailed implementation plan
Environmental claims about future performance — such as "we will be carbon neutral by 2030" or "our packaging will be 100% recyclable by 2027" — must be supported by:
- A detailed and realistic implementation plan;
- Measurable and time-bound targets;
- Independent third-party verification of progress;
- Publicly available and verifiable commitments that are clear and objective.
Without these elements, a forward-looking claim is likely to qualify as a misleading commercial practice.
5. Claims cannot overstate scope
A claim that implies an environmental benefit applies to the entire product or the entire business when it actually applies only to a specific aspect is prohibited. For example, claiming a product is "sustainable" because one component is recycled, while the rest of the product has significant environmental costs, would be caught by this rule.
| Claim Type |
Status from 27 Sept 2026 |
What Is Required Instead |
| "Eco-friendly," "green," "sustainable" (standalone) |
Prohibited |
A recognised certification (EU Ecolabel, ISO 14024 Type I) or a specific, substantiated claim |
| "Carbon neutral" based on offsets |
Prohibited |
Claims based on actual emissions reductions verified through audited data |
| Self-created sustainability label |
Prohibited |
A label based on a recognised certification scheme or public authority |
| "We will be net zero by 2030" |
Allowed only with plan |
Detailed implementation plan, measurable targets, independent verification |
| "Recyclable packaging" (when only one component is recyclable) |
Prohibited |
Claim must be specific to the component that is actually recyclable |
ECGT vs. CSRD: What's the Difference?
These two regulations are often confused because both deal with sustainability and both are EU law. But they serve different purposes and apply to different situations.
The Corporate Sustainability Reporting Directive (CSRD) governs entity-level sustainability reporting. It requires large companies to publish standardised, independently assured sustainability data alongside their financial statements, using the European Sustainability Reporting Standards (ESRS). The CSRD was significantly revised by the Omnibus I Directive, which entered into force in March 2026. The scope was narrowed to companies with more than 1,000 employees AND net turnover above €450 million, removing approximately 85–90% of companies that were previously in scope. Reporting for the newly in-scope companies is now due in 2028, using data from the financial year starting on or after 1 January 2027.
The ECGT Directive governs consumer-facing environmental claims. It applies to any company making green claims to EU consumers — regardless of company size, sector, or headquarters location. It is about what you say to consumers, not what you report to investors.
| Aspect |
CSRD |
ECGT |
| Purpose |
Sustainability reporting to investors and regulators |
Consumer protection against greenwashing |
| Who is covered |
Large companies (>1,000 employees, >€450M turnover) |
Any company making consumer-facing green claims in the EU |
| Focus level |
Entity-level |
Product and service level |
| Key obligation |
Publish assured ESRS reports |
Substantiate every environmental claim before publication |
| Enforcement |
National competent authorities |
Consumer protection authorities; fines up to 4% of turnover |
Critical point: CSRD compliance does not automatically mean ECGT compliance. A company can produce a fully CSRD-compliant sustainability report and still violate the ECGT if its consumer-facing marketing makes vague or unsubstantiated green claims. Entity-level disclosures do not satisfy product-level evidentiary requirements.
The Green Claims Directive: What Happened and Why It Still Matters
Many businesses first heard about EU green claims regulation through the Green Claims Directive (GCD) — a separate, stricter proposal introduced by the European Commission in March 2023. The GCD would have required mandatory pre-market third-party verification of all environmental claims, with claims checked by an independent accredited verifier before they could be used publicly.
That proposal was withdrawn by the European Commission on 20 June 2025. The official reason cited was the burden on smaller companies and the "overly complex" procedures involved.
The withdrawal of the GCD does not affect the ECGT. The ECGT proceeds on its own legal basis as an amendment to existing consumer protection law. It is already in force and will be enforced from September 2026.
Some companies interpreted the GCD withdrawal as a signal that the EU was softening its approach to greenwashing. That interpretation is incorrect. The ECGT is the law that will actually be enforced, and its requirements are substantial.
Penalties and Enforcement: The Financial Reality of Non-Compliance
Penalties under the ECGT are set by individual member states, but the EU framework requires them to be effective, proportionate, and dissuasive. In practice, this means:
- Fines of up to 4% of annual turnover in the relevant member state(s).
- Confiscation of revenues obtained from non-compliant claims.
- Exclusion from public procurement for up to 12 months.
- For widespread infringements affecting multiple member states, coordinated EU-level enforcement is possible.
Each individual claim can be assessed and penalised independently. For companies with large digital footprints or extensive product portfolios, this creates cumulative regulatory exposure. A single product line with multiple non-compliant claims across packaging, website, and advertising could face multiple penalties.
National authorities have already demonstrated willingness to impose significant fines for unsubstantiated environmental claims. Recent examples include €1 million against Shein in Italy and €25 million against DWS in Germany.
How Companies Can Prepare: A Practical Roadmap
The deadline is fixed. The requirements are clear. Here is a structured approach to compliance.
Step 1: Conduct a claim audit
Identify every environmental and sustainability claim your company makes to consumers. This includes:
- Product packaging and labels
- Company websites and product pages
- Advertising and social media
- ESG and sustainability reports that are reused in consumer-facing materials
- Investor presentations and procurement submissions
- Job adverts and employer branding materials
Assign each claim a risk score based on how vague it is, how prominent it is, and whether supporting evidence exists.
Step 2: Build an evidence library
For each claim you intend to keep, assemble verifiable, structured evidence: data, calculations, methodologies, and sources that can withstand regulatory scrutiny. Evidence must be science-based and, where relevant, based on independent, peer-reviewed, widely recognised, robust and verifiable scientific evidence.
The evidence must be available together with the claim — either in physical form or via a weblink, QR code, or equivalent.
Step 3: Reword or remove non-compliant claims
Vague and absolute language must be replaced with precise, measurable wording that accurately reflects what the evidence supports. "Eco-friendly" becomes "packaging contains 80% post-consumer recycled content, verified by [certification body]." "Carbon neutral" based on offsets must be removed entirely.
Step 4: Obtain recognised certification where required
For generic claims that you want to keep, you will need a recognised certification. The EU Ecolabel, national EN ISO 14024 Type I schemes, and equivalent public accreditation schemes are the paths to compliance.
Step 5: Embed governance controls
Compliance cannot be a one-time project. New claims must be reviewed before publication. Controls should be embedded into marketing, product development, and communications workflows so that non-compliant statements never go live in the first place.
This requires collaboration between legal, ESG, and communications teams. Siloed responsibility is one of the most common causes of green claims failure. Legal validates claims against the directive, ESG builds the evidence, and communications ensures claims remain credible and compelling.
Step 6: Address supply chain traceability
For claims about raw materials, recycled content, or supply chain sustainability, you need traceability upstream. The ECGT requires that claims be specific and substantiated — which means knowing where materials come from and being able to prove it. Raw materials are often the riskiest and most valuable link in the compliance chain.
FAQ: Answering the Questions Businesses Are Asking
Does the ECGT apply to my company if I am based outside the EU?
Yes, if you sell products or services to EU consumers. The directive's reach is determined by market, not headquarters. Any company making consumer-facing environmental claims in the EU — regardless of where it is incorporated — is subject to the rules. This includes e-commerce stores, brands, manufacturers, retailers, marketplaces, and service providers.
Can I still use the word "sustainable" if I provide a footnote?
Not as a generic claim. A standalone "sustainable" claim on packaging or a website is prohibited unless you hold a recognised excellent environmental performance certification. A footnote explaining what you mean does not convert a generic claim into a compliant one unless the specification is clear and prominent on the same medium — meaning it must be visible and understandable without the consumer having to click elsewhere or search for additional information.
What if I am already CSRD-compliant?
CSRD compliance does not satisfy ECGT requirements. Entity-level sustainability disclosures do not automatically meet product-level evidentiary standards. If any portion of your CSRD report is reused in consumer-facing advertising or marketing, the full ECGT evidentiary standard applies to that content.
Can I still claim carbon neutrality if I buy high-quality carbon credits?
No. Product-level carbon neutrality claims based exclusively on greenhouse gas offsetting are banned outright. This applies regardless of the quality or certification of the credits purchased. You can claim carbon neutrality only if you can demonstrate actual emissions reductions within your own operations and value chain, verified through audited data.
What happens if I do nothing?
From 27 September 2026, your non-compliant claims become enforceable violations. Regulators can impose fines of up to 4% of annual turnover, confiscate revenues from non-compliant claims, and exclude you from public procurement. Each individual claim can be penalised separately. National authorities have already demonstrated they are willing to impose substantial fines.
Conclusion
The ECGT Directive represents a fundamental shift in how companies must communicate about sustainability. The era of vague, unsubstantiated green marketing is ending. What replaces it is a system where every environmental claim must be specific, verifiable, and backed by evidence.
For companies that prepare properly, this is not just a compliance burden. It is a competitive opportunity. Consumers want to trust sustainability claims — 59% say a recognised label would help them overcome greenwashing concerns. Companies that can provide that trust will stand out in a market where credibility is increasingly scarce.
The deadline is 27 September 2026. The time to act is now.
<div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtMExSR9tlLamNsm76s7t4qsUef5zPoVDSr4iGvEwzu8dmcDC2ZNqFZZXEXuisn1LzwWWPgWio7VPTki0UYz232o0UBnM4Y-9IToBLlF7Sg7o_fbmEXcc009IEU2IRWUtK_uUzGH8LK-c9_GbkYa_sNCtEnKuxr_BGAiJ-YWdOG-XNOJyWDFu3wmCm/s1600/Virtual_cards_protect_data_breaches_20260914142734.jpeg" style="display: block; padding: 1em 0; text-align: center; "><img alt="" border="0" data-original-height="1024" data-original-width="1024" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtMExSR9tlLamNsm76s7t4qsUef5zPoVDSr4iGvEwzu8dmcDC2ZNqFZZXEXuisn1LzwWWPgWio7VPTki0UYz232o0UBnM4Y-9IToBLlF7Sg7o_fbmEXcc009IEU2IRWUtK_uUzGH8LK-c9_GbkYa_sNCtEnKuxr_BGAiJ-YWdOG-XNOJyWDFu3wmCm/s1600/Virtual_cards_protect_data_breaches_20260914142734.jpeg"/></a></div>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">The New EU Regulation Forcing Companies to Prove ESG Claims</h2>
<p><span style="font-size:1.15em; font-weight:700;">The short answer:</span> From <strong>27 September 2026</strong>, any company selling products or services to consumers in the EU must be able to prove every environmental and sustainability claim it makes. Generic terms like "eco-friendly," "green," or "sustainable" are effectively banned unless backed by recognised certification or verifiable evidence. The regulation driving this change is the <strong>Empowering Consumers for the Green Transition Directive (ECGT)</strong> — also known as <strong>Directive (EU) 2024/825</strong> or <strong>EmpCo</strong>.</p>
<p>This is not a voluntary framework. It is binding consumer protection law, and it applies regardless of where your company is headquartered. If you market to EU consumers, you are in scope.</p>
<p>Below, you will find what the ECGT requires, how it differs from the Corporate Sustainability Reporting Directive (CSRD), what happened to the separate Green Claims Directive, the penalties for non-compliance, and a practical roadmap for getting ready before the deadline.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">The Core Problem: Why "Green" Can No Longer Be Just a Marketing Word</h2>
<p>For years, companies have used environmental language as a differentiator. "Climate neutral." "Eco-friendly packaging." "Sustainably sourced." These phrases moved products off shelves and attracted investors.</p>
<p>The evidence suggests many of those claims were not backed by much. A 2020 European Commission study found that <strong>53.3% of green claims examined were vague, misleading, or unfounded</strong>, and <strong>40% were entirely unsubstantiated</strong>. More recent research cited by compliance analysts suggests that <strong>42% of green claims made in Europe are exaggerated, false, or misleading</strong>.</p>
<p>The ECGT is the EU's response to that reality. It does not discourage sustainability communication — it demands that such communication be <strong>specific, substantiated, and verifiable</strong>. Vague claims are out. Evidence is in.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">What the ECGT Directive Actually Requires</h2>
<p>The ECGT amends two foundational pieces of EU consumer law: the <strong>Unfair Commercial Practices Directive (2005/29/EC)</strong> and the <strong>Consumer Rights Directive (2011/83/EU)</strong>. It introduces new prohibitions and expands the list of "blacklisted" commercial practices — practices that are considered unfair in all circumstances, without the need to prove actual consumer harm.</p>
<p>Member states were required to transpose the directive into national law by <strong>27 March 2026</strong>. Enforcement begins on <strong>27 September 2026</strong>, with no transition period.</p>
<p>The core requirements are as follows:</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">1. Generic environmental claims are banned without proof</h3>
<p>Terms such as <strong>"eco-friendly," "green," "sustainable," "climate positive,"</strong> and <strong>"nature-friendly"</strong> are prohibited unless the company can demonstrate recognised excellent environmental performance. In practice, this means holding a certification such as the <strong>EU Ecolabel</strong>, a national <strong>EN ISO 14024 Type I scheme</strong> (such as Germany's Blue Angel or the Nordic Swan), or achieving maximum performance under applicable EU law (for example, the Energy Labelling Regulation).</p>
<p>A generic claim cannot be fixed with a vague footnote. The specification must be <strong>clear and prominent on the same medium</strong> where the claim appears — packaging, website, or advertisement. The level of detail is assessed case by case, taking into account the overall impression on the average consumer and the constraints of the medium.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">2. Offset-based "carbon neutral" product claims are blacklisted</h3>
<p>Claiming that a product is <strong>carbon neutral, climate neutral, or has a reduced or positive environmental impact based solely on greenhouse gas offsetting</strong> is prohibited. This applies regardless of the quality or certification of the carbon credits purchased. Offsetting cannot be used as the legal basis for a product-level climate claim.</p>
<p>This is a significant shift. Many companies that purchased verified carbon credits and labelled products "carbon neutral" will need to remove those labels or replace them with claims based on actual emissions reductions within their own value chain.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">3. Sustainability labels must be independently verified</h3>
<p>Self-created sustainability labels — labels that are not based on a recognised certification scheme or established by public authorities — are prohibited. Only labels backed by third-party verification or public governance are permitted.</p>
<p>This targets the proliferation of in-house "green badges" and proprietary sustainability seals that companies created to signal environmental responsibility without external scrutiny.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">4. Forward-looking claims require a detailed implementation plan</h3>
<p>Environmental claims about <strong>future performance</strong> — such as "we will be carbon neutral by 2030" or "our packaging will be 100% recyclable by 2027" — must be supported by:</p>
<ul>
<li>A <strong>detailed and realistic implementation plan</strong>;</li>
<li><strong>Measurable and time-bound targets</strong>;</li>
<li><strong>Independent third-party verification</strong> of progress;</li>
<li><strong>Publicly available and verifiable commitments</strong> that are clear and objective.</li>
</ul>
<p>Without these elements, a forward-looking claim is likely to qualify as a misleading commercial practice.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">5. Claims cannot overstate scope</h3>
<p>A claim that implies an environmental benefit applies to the <strong>entire product or the entire business</strong> when it actually applies only to a specific aspect is prohibited. For example, claiming a product is "sustainable" because one component is recycled, while the rest of the product has significant environmental costs, would be caught by this rule.</p>
<div style="overflow-x:auto; max-width:100%; margin: 24px 0;">
<table style="width:100%; min-width:600px; border-collapse:collapse; font-size:0.95em;">
<thead>
<tr style="background-color:#f2f2f2;">
<th style="border:1px solid #ddd; padding:10px; text-align:left;">Claim Type</th>
<th style="border:1px solid #ddd; padding:10px; text-align:left;">Status from 27 Sept 2026</th>
<th style="border:1px solid #ddd; padding:10px; text-align:left;">What Is Required Instead</th>
</tr>
</thead>
<tbody>
<tr>
<td style="border:1px solid #ddd; padding:10px;">"Eco-friendly," "green," "sustainable" (standalone)</td>
<td style="border:1px solid #ddd; padding:10px;">Prohibited</td>
<td style="border:1px solid #ddd; padding:10px;">A recognised certification (EU Ecolabel, ISO 14024 Type I) or a specific, substantiated claim</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">"Carbon neutral" based on offsets</td>
<td style="border:1px solid #ddd; padding:10px;">Prohibited</td>
<td style="border:1px solid #ddd; padding:10px;">Claims based on actual emissions reductions verified through audited data</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Self-created sustainability label</td>
<td style="border:1px solid #ddd; padding:10px;">Prohibited</td>
<td style="border:1px solid #ddd; padding:10px;">A label based on a recognised certification scheme or public authority</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">"We will be net zero by 2030"</td>
<td style="border:1px solid #ddd; padding:10px;">Allowed only with plan</td>
<td style="border:1px solid #ddd; padding:10px;">Detailed implementation plan, measurable targets, independent verification</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">"Recyclable packaging" (when only one component is recyclable)</td>
<td style="border:1px solid #ddd; padding:10px;">Prohibited</td>
<td style="border:1px solid #ddd; padding:10px;">Claim must be specific to the component that is actually recyclable</td>
</tr>
</tbody>
</table>
</div>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">ECGT vs. CSRD: What's the Difference?</h2>
<p>These two regulations are often confused because both deal with sustainability and both are EU law. But they serve different purposes and apply to different situations.</p>
<p>The <strong>Corporate Sustainability Reporting Directive (CSRD)</strong> governs <strong>entity-level sustainability reporting</strong>. It requires large companies to publish standardised, independently assured sustainability data alongside their financial statements, using the European Sustainability Reporting Standards (ESRS). The CSRD was significantly revised by the <strong>Omnibus I Directive</strong>, which entered into force in March 2026. The scope was narrowed to companies with <strong>more than 1,000 employees AND net turnover above €450 million</strong>, removing approximately 85–90% of companies that were previously in scope. Reporting for the newly in-scope companies is now due in <strong>2028</strong>, using data from the financial year starting on or after 1 January 2027.</p>
<p>The <strong>ECGT Directive</strong> governs <strong>consumer-facing environmental claims</strong>. It applies to any company making green claims to EU consumers — regardless of company size, sector, or headquarters location. It is about what you say to consumers, not what you report to investors.</p>
<div style="overflow-x:auto; max-width:100%; margin: 24px 0;">
<table style="width:100%; min-width:600px; border-collapse:collapse; font-size:0.95em;">
<thead>
<tr style="background-color:#f2f2f2;">
<th style="border:1px solid #ddd; padding:10px; text-align:left;">Aspect</th>
<th style="border:1px solid #ddd; padding:10px; text-align:left;">CSRD</th>
<th style="border:1px solid #ddd; padding:10px; text-align:left;">ECGT</th>
</tr>
</thead>
<tbody>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Purpose</td>
<td style="border:1px solid #ddd; padding:10px;">Sustainability reporting to investors and regulators</td>
<td style="border:1px solid #ddd; padding:10px;">Consumer protection against greenwashing</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Who is covered</td>
<td style="border:1px solid #ddd; padding:10px;">Large companies (>1,000 employees, >€450M turnover)</td>
<td style="border:1px solid #ddd; padding:10px;">Any company making consumer-facing green claims in the EU</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Focus level</td>
<td style="border:1px solid #ddd; padding:10px;">Entity-level</td>
<td style="border:1px solid #ddd; padding:10px;">Product and service level</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Key obligation</td>
<td style="border:1px solid #ddd; padding:10px;">Publish assured ESRS reports</td>
<td style="border:1px solid #ddd; padding:10px;">Substantiate every environmental claim before publication</td>
</tr>
<tr>
<td style="border:1px solid #ddd; padding:10px;">Enforcement</td>
<td style="border:1px solid #ddd; padding:10px;">National competent authorities</td>
<td style="border:1px solid #ddd; padding:10px;">Consumer protection authorities; fines up to 4% of turnover</td>
</tr>
</tbody>
</table>
</div>
<p><span style="font-size:1.15em; font-weight:700;">Critical point:</span> <strong>CSRD compliance does not automatically mean ECGT compliance.</strong> A company can produce a fully CSRD-compliant sustainability report and still violate the ECGT if its consumer-facing marketing makes vague or unsubstantiated green claims. Entity-level disclosures do not satisfy product-level evidentiary requirements.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">The Green Claims Directive: What Happened and Why It Still Matters</h2>
<p>Many businesses first heard about EU green claims regulation through the <strong>Green Claims Directive (GCD)</strong> — a separate, stricter proposal introduced by the European Commission in March 2023. The GCD would have required <strong>mandatory pre-market third-party verification</strong> of all environmental claims, with claims checked by an independent accredited verifier before they could be used publicly.</p>
<p>That proposal was <strong>withdrawn by the European Commission on 20 June 2025</strong>. The official reason cited was the burden on smaller companies and the "overly complex" procedures involved.</p>
<p>The withdrawal of the GCD <strong>does not affect the ECGT</strong>. The ECGT proceeds on its own legal basis as an amendment to existing consumer protection law. It is already in force and will be enforced from September 2026.</p>
<p>Some companies interpreted the GCD withdrawal as a signal that the EU was softening its approach to greenwashing. That interpretation is incorrect. The ECGT is the law that will actually be enforced, and its requirements are substantial.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">Penalties and Enforcement: The Financial Reality of Non-Compliance</h2>
<p>Penalties under the ECGT are set by individual member states, but the EU framework requires them to be <strong>effective, proportionate, and dissuasive</strong>. In practice, this means:</p>
<ul>
<li><strong>Fines of up to 4% of annual turnover</strong> in the relevant member state(s).</li>
<li><strong>Confiscation of revenues</strong> obtained from non-compliant claims.</li>
<li><strong>Exclusion from public procurement</strong> for up to 12 months.</li>
<li>For widespread infringements affecting multiple member states, <strong>coordinated EU-level enforcement</strong> is possible.</li>
</ul>
<p>Each individual claim can be assessed and penalised independently. For companies with large digital footprints or extensive product portfolios, this creates <strong>cumulative regulatory exposure</strong>. A single product line with multiple non-compliant claims across packaging, website, and advertising could face multiple penalties.</p>
<p>National authorities have already demonstrated willingness to impose significant fines for unsubstantiated environmental claims. Recent examples include <strong>€1 million</strong> against Shein in Italy and <strong>€25 million</strong> against DWS in Germany.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">How Companies Can Prepare: A Practical Roadmap</h2>
<p>The deadline is fixed. The requirements are clear. Here is a structured approach to compliance.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 1: Conduct a claim audit</h3>
<p>Identify every environmental and sustainability claim your company makes to consumers. This includes:</p>
<ul>
<li>Product packaging and labels</li>
<li>Company websites and product pages</li>
<li>Advertising and social media</li>
<li>ESG and sustainability reports that are reused in consumer-facing materials</li>
<li>Investor presentations and procurement submissions</li>
<li>Job adverts and employer branding materials</li>
</ul>
<p>Assign each claim a risk score based on how vague it is, how prominent it is, and whether supporting evidence exists.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 2: Build an evidence library</h3>
<p>For each claim you intend to keep, assemble verifiable, structured evidence: data, calculations, methodologies, and sources that can withstand regulatory scrutiny. Evidence must be <strong>science-based</strong> and, where relevant, based on independent, peer-reviewed, widely recognised, robust and verifiable scientific evidence.</p>
<p>The evidence must be <strong>available together with the claim</strong> — either in physical form or via a weblink, QR code, or equivalent.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 3: Reword or remove non-compliant claims</h3>
<p>Vague and absolute language must be replaced with precise, measurable wording that accurately reflects what the evidence supports. "Eco-friendly" becomes "packaging contains 80% post-consumer recycled content, verified by [certification body]." "Carbon neutral" based on offsets must be removed entirely.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 4: Obtain recognised certification where required</h3>
<p>For generic claims that you want to keep, you will need a recognised certification. The EU Ecolabel, national EN ISO 14024 Type I schemes, and equivalent public accreditation schemes are the paths to compliance.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 5: Embed governance controls</h3>
<p>Compliance cannot be a one-time project. New claims must be reviewed before publication. Controls should be embedded into marketing, product development, and communications workflows so that non-compliant statements never go live in the first place.</p>
<p>This requires collaboration between <strong>legal, ESG, and communications teams</strong>. Siloed responsibility is one of the most common causes of green claims failure. Legal validates claims against the directive, ESG builds the evidence, and communications ensures claims remain credible and compelling.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Step 6: Address supply chain traceability</h3>
<p>For claims about raw materials, recycled content, or supply chain sustainability, you need traceability upstream. The ECGT requires that claims be specific and substantiated — which means knowing where materials come from and being able to prove it. Raw materials are often the riskiest and most valuable link in the compliance chain.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">FAQ: Answering the Questions Businesses Are Asking</h2>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Does the ECGT apply to my company if I am based outside the EU?</h3>
<p>Yes, if you sell products or services to EU consumers. The directive's reach is determined by <strong>market, not headquarters</strong>. Any company making consumer-facing environmental claims in the EU — regardless of where it is incorporated — is subject to the rules. This includes e-commerce stores, brands, manufacturers, retailers, marketplaces, and service providers.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Can I still use the word "sustainable" if I provide a footnote?</h3>
<p>Not as a generic claim. A standalone "sustainable" claim on packaging or a website is prohibited unless you hold a recognised excellent environmental performance certification. A footnote explaining what you mean does not convert a generic claim into a compliant one unless the specification is <strong>clear and prominent on the same medium</strong> — meaning it must be visible and understandable without the consumer having to click elsewhere or search for additional information.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">What if I am already CSRD-compliant?</h3>
<p>CSRD compliance does not satisfy ECGT requirements. Entity-level sustainability disclosures do not automatically meet product-level evidentiary standards. If any portion of your CSRD report is reused in consumer-facing advertising or marketing, the full ECGT evidentiary standard applies to that content.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">Can I still claim carbon neutrality if I buy high-quality carbon credits?</h3>
<p>No. Product-level carbon neutrality claims based <strong>exclusively on greenhouse gas offsetting</strong> are banned outright. This applies regardless of the quality or certification of the credits purchased. You can claim carbon neutrality only if you can demonstrate actual emissions reductions within your own operations and value chain, verified through audited data.</p>
<h3 style="font-size:23px; line-height:1.35; margin-top:25px; margin-bottom:12px;">What happens if I do nothing?</h3>
<p>From 27 September 2026, your non-compliant claims become enforceable violations. Regulators can impose fines of up to 4% of annual turnover, confiscate revenues from non-compliant claims, and exclude you from public procurement. Each individual claim can be penalised separately. National authorities have already demonstrated they are willing to impose substantial fines.</p>
<h2 style="font-size:28px; line-height:1.3; margin-top:32px; margin-bottom:16px;">Conclusion</h2>
<p>The ECGT Directive represents a fundamental shift in how companies must communicate about sustainability. The era of vague, unsubstantiated green marketing is ending. What replaces it is a system where every environmental claim must be <strong>specific, verifiable, and backed by evidence</strong>.</p>
<p>For companies that prepare properly, this is not just a compliance burden. It is a competitive opportunity. Consumers want to trust sustainability claims — <strong>59% say a recognised label would help them overcome greenwashing concerns</strong>. Companies that can provide that trust will stand out in a market where credibility is increasingly scarce.</p>
<p>The deadline is <strong>27 September 2026</strong>. The time to act is now.</p>
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