EU Commission withdraws proposed Green Claims Directive

The European Commission withdrew its proposed Green Claims Directive, ESG Today reported. The withdrawal appears in the Commission's 2027 work programme, published Wednesday. The proposal had aimed to protect consumers from greenwashing claims about the environmental attributes of products and services.

Introduced in March 2023, the directive would have set minimum requirements for companies to substantiate, communicate and verify their green claims. Voluntary environmental statements would have needed independent verification and scientific evidence. It also targeted private environmental labels, requiring them to be reliable, transparent, independently verified and regularly reviewed. New labels would have been allowed only if developed at EU level and approved only if they showed greater environmental ambition than existing schemes. The Commission cited studies finding that more than half of green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated.

For managers and selectors marketing funds with environmental attributes in the EU, no substantiation or verification duty under the directive ever took effect because the instrument stayed a proposal. What applies instead is the Directive on Empowering Consumers for the Green Transition, which recently entered into force and aims to protect consumers from deceptive sustainability-related marketing. A sustainability claim that cannot be backed is now exposed to those rules, not to the verification regime the Green Claims Directive would have built.

The proposal stalled in June 2025 after two trilogue meetings among the Commission, Parliament and Council. The European People's Party, the largest party in the Parliament, asked the Commission to 'reconsiders and ultimately withdraws' the directive. The EPP argued the rules would be overly burdensome and complex. At a press conference after the letter, a Commission spokesperson said 'the Commission intends to withdraw the Green Claims proposal.' A later statement to ESG Today clarified that the proposal had not been withdrawn at that point, while saying the Commission did intend to withdraw it.

The withdrawal comes as other sustainability disclosure rules shift. As Private Wealth Daily reported, the FCA dropped plans for mandatory IFRS-based climate reporting as EU anti-greenwashing rules took effect.