Greenwashing and the New Rules of Transparency
Why Substantiated Environmental Claims Are a Business Imperative
The demand for reliable sustainability information is growing. Across industries, companies are under increasing pressure to disclose the environmental impact of their products—but doing so without a strong foundation can quickly backfire. Recent research and evolving regulations make it clear: misleading green claims are no longer just a reputational risk—they now carry real legal consequences.
Greenwashing in a Shifting Regulatory Landscape
A 2020 European Commission study found that more than half of environmental claims were vague, misleading, or entirely unsubstantiated. This reflects a serious credibility gap—one that undermines consumer trust and the market for truly sustainable products.
To close this gap, the EU enacted the Directive on Empowering Consumers for the Green Transition (EmpCo) in March 2024. Starting in 2026, companies will be banned from using terms like "eco" or "green" unless those claims are backed by verifiable, evidence-based data. A separate legislative effort—the proposed Green Claims Directive (GCD)—sought to go further by introducing harmonized requirements for how environmental claims must be substantiated and communicated. While the GCD's future is uncertain, EmpCo alone signals a turning point: under EU consumer protection law, greenwashing is no longer tolerated.
However, while EmpCo sets boundaries around what is no longer permissible, it offers limited guidance on how companies should communicate sustainability in a credible way. In this gray zone, businesses face rising uncertainty—and rising risk.
A 2020 European Commission study found that more than half of environmental claims were vague, misleading, or entirely unsubstantiated. This reflects a serious credibility gap—one that undermines consumer trust and the market for truly sustainable products.
To close this gap, the EU enacted the Directive on Empowering Consumers for the Green Transition (EmpCo) in March 2024. Starting in 2026, companies will be banned from using terms like "eco" or "green" unless those claims are backed by verifiable, evidence-based data. A separate legislative effort—the proposed Green Claims Directive (GCD)—sought to go further by introducing harmonized requirements for how environmental claims must be substantiated and communicated. While the GCD's future is uncertain, EmpCo alone signals a turning point: under EU consumer protection law, greenwashing is no longer tolerated.
However, while EmpCo sets boundaries around what is no longer permissible, it offers limited guidance on how companies should communicate sustainability in a credible way. In this gray zone, businesses face rising uncertainty—and rising risk.
The Consumer Trust Gap
Research shows that consumers often struggle to tell the difference between genuinely sustainable products and those that merely appear to be. Experimental studies confirm that consumers are more likely to choose products with green imagery or claims—even if those claims are unverified—especially when making quick decisions or when not prompted to think critically.
This creates a double challenge for businesses that are investing in real environmental performance: not only is their credibility at risk of being diluted by less rigorous competitors, but consumer confusion can also diminish the return on sustainability efforts.
Why Standardized, Substantiated Claims Matter
This is where internationally recognized standards such as ISO 14044 (Life Cycle Assessment) and ISO 14067 (Product Carbon Footprint) play a vital role. These frameworks provide consistent, science-based methods for measuring environmental impacts across a product's life cycle—from raw material extraction through to end-of-life.
By following these standards, companies can not only stay ahead of regulatory demands, but also build robust, data-driven sustainability narratives—reducing the risk of being accused of greenwashing.
Environmental Data and Third-Party Verification: A Strategic Asset
Credible environmental claims rely on robust data and trusted validation. Here's why third-party verification plays a crucial role:
Research shows that consumers often struggle to tell the difference between genuinely sustainable products and those that merely appear to be. Experimental studies confirm that consumers are more likely to choose products with green imagery or claims—even if those claims are unverified—especially when making quick decisions or when not prompted to think critically.
This creates a double challenge for businesses that are investing in real environmental performance: not only is their credibility at risk of being diluted by less rigorous competitors, but consumer confusion can also diminish the return on sustainability efforts.
Why Standardized, Substantiated Claims Matter
This is where internationally recognized standards such as ISO 14044 (Life Cycle Assessment) and ISO 14067 (Product Carbon Footprint) play a vital role. These frameworks provide consistent, science-based methods for measuring environmental impacts across a product's life cycle—from raw material extraction through to end-of-life.
By following these standards, companies can not only stay ahead of regulatory demands, but also build robust, data-driven sustainability narratives—reducing the risk of being accused of greenwashing.
Environmental Data and Third-Party Verification: A Strategic Asset
Credible environmental claims rely on robust data and trusted validation. Here's why third-party verification plays a crucial role:
- Data-driven insights: Reliable assessments—such as Product Carbon Footprints (PCF) and Life Cycle Assessments (LCA)—require comprehensive data across the entire value chain.
- Operational challenges: Many organizations, especially SMEs, face obstacles such as data gaps, limited internal resources, and methodological uncertainty.
- Independent assurance: Third-party reviews enhance the credibility of sustainability claims by validating data and methodologies against established standards.
- Risk mitigation: External verification identifies blind spots and reduces the likelihood of greenwashing allegations
- Strategic advantage: Verified claims help companies build trust, meet regulatory expectations, and future-proof their sustainability communications.
Turning Compliance into Competitive Advantage
The path forward is clear: businesses that commit to transparent, evidence-based sustainability practices will be better equipped to meet regulatory requirements, avoid reputational risks, and earn long-term trust from consumers and regulators alike.
EmpCo marks an important step—but it’s just the beginning. As regulatory clarity continues to evolve, the responsibility for setting the bar higher will increasingly rest with companies themselves—and with the partners who help them navigate this complexity.
Prefer to learn more about our services first? DEKRA offers Product Life Cycle and Carbon Footprint Assessments and Critical Reviews according to ISO 14071 to avoid greenwashing.
The path forward is clear: businesses that commit to transparent, evidence-based sustainability practices will be better equipped to meet regulatory requirements, avoid reputational risks, and earn long-term trust from consumers and regulators alike.
EmpCo marks an important step—but it’s just the beginning. As regulatory clarity continues to evolve, the responsibility for setting the bar higher will increasingly rest with companies themselves—and with the partners who help them navigate this complexity.
Prefer to learn more about our services first? DEKRA offers Product Life Cycle and Carbon Footprint Assessments and Critical Reviews according to ISO 14071 to avoid greenwashing.