The European Union’s latest crackdown on organisational “greenwashing” has officially entered into force, with businesses now required to substantiate claims concerning the environmental performance of their products and services.
Directive 2024/825, the “Empowering Consumers for the Green Transition Directive,” entered into force on September 27 as part of the EU’s effort to tighten controls over environmental marketing and prevent consumers from being misled by sustainability-related claims.
The rules will apply across all 27 EU member states and are determined by where the customer is based, rather than solely by where a business is registered. As a result, UK and US companies with operations serving customers based within the EU will also have to comply with the regulations for those EU activities.
The new framework will affect business aviation operators, brokers, handling agents and sales teams, which will need to ensure that statements about the environmental impact of their products and services comply with the new requirements.
The directive is designed to improve transparency at the point of purchase and address commercial practices that can prevent consumers from making informed and sustainable choices.
The EU states that the measures target practices including premature obsolescence of goods, misleading environmental claims or “greenwashing,” misleading information concerning the social characteristics of products or traders’ businesses, as well as sustainability labels that are not transparent or credible.
What is being monitored?
Environmental language commonly used to present products or services as having more positive climate attributes will face tighter scrutiny.
Terms such as “eco-friendly,” “green” and “sustainable” will be prohibited unless the business making the claims can verify that the environmental benefits originate within its own operations or value chain and can demonstrate them through an independent audit.
The use of claims including “carbon neutral,” “climate neutral” and “carbon positive” will also be banned when those statements are used to describe greenhouse gas offsetting that takes place outside the company’s value chain.
Potential penalties
The directive currently provides no exemption for smaller businesses.
Companies found to be non-compliant could face fines of up to 4 percent of their annual turnover. Authorities may also confiscate revenues generated through a non-compliant claim and exclude offending businesses from public procurement for a period of up to 12 months.
