Green Claims Directive withdrawn: But the mission remains

On 19 June 2025, the European Commission formally announced its intention to withdraw the proposal for the Green Claims Directive (GCD). The decision follows concerns raised by key political actors, including the EPP Shadow Rapporteurs, about the administrative burden and pre-approval mechanisms foreseen in the proposal.

Introduced in March 2023, the GCD aimed to tackle the growing issue of unsubstantiated or misleading environmental claims in the EU market. It proposed harmonized criteria and minimum requirements for voluntary B2C green claims, including mandatory third-party verification. The goal was to enhance trust, comparability, and clarity in sustainability communication.

While the withdrawal halts the development of a harmonized EU framework, it does not signal a retreat from expectations. Quite the opposite: scrutiny of sustainability claims is increasing –   not only from regulators, but from consumers, investors, NGOs, and corporate buyers. In this context, the absence of dedicated legislation shifts the pressure back onto companies to demonstrate leadership and credibility through voluntary means.

The mission remains: From compliance to credibility
Without the GCD, companies must rely on existing frameworks – including the Unfair Commercial Practices Directive (UCPD) – which still require that claims such as “eco-friendly” or “climate neutral” be credible, specific, and substantiated. Legal challenges from NGOs have already shown that the bar for green claims is not theoretical – it’s real, rising, and enforceable.

But for forward-thinking organizations, this moment is not primarily about avoiding risk. It is about building strategic trust. It’s about owning your impact and demonstrating sustainability performance as a competitive advantage, not a compliance hurdle.

Climate, carbon and credibility
Climate-related emissions from products and production remain a critical risk. Atmospheric CO₂ levels have exceeded 430 parts per million (ppm) since records began and are still rising – edging closer to the 450 ppm ceiling referenced in the Paris Agreement. The margin for delay is vanishing.

In parallel, carbon pricing, disclosures, and competitive carbon performance are becoming business norms. Carbon will increasingly function as a reverse currency – a cost, a constraint, or a lost opportunity. Companies with weak carbon narratives will face growing barriers with investors, customers, and procurement partners.

Excuses will not save the planet, neither will vague claims. In this evolving landscape, those who lead with integrity and impact will shape the market.

Earning trust through transparent product sustainability claims
At a time when over half of environmental product claims are found to be vague or misleading, we believe the withdrawal of the GCD further reinforces the need for credible product sustainability strategies, progress and disclosure. This means more than avoiding greenwashing – it means enabling your organization and your customers to make meaningful, data-driven decisions that increase transparency and accelerate impact.

This is where the opportunity lies: In a crowded and noisy market, companies that communicate with clarity, back their claims with verified data, and empower their customers to act on trustworthy information will stand out. Strategic trustworthiness is no longer a passive reputation asset – it is a proactive business advantage that can differentiate offerings, strengthen relationships, and drive preference among buyers, partners, and investors.

Not a step back, but a test of maturity
This is not a green light to relax – it’s a call to refocus. In a crowded market, not every company is seeking to lead. Some will continue to treat green claims as checkbox exercises or marketing opportunities.

But for those who see genuine sustainability impact as core to their value creation, the mission remains clear: be credible, be transparent, and turn sustainability into an enduring business advantage.

With contributions from Antonio Astone and Jamal Miah.

6/26/2025 10:02:00 AM