The EU Green Claims Directive represents a landmark regulatory initiative aimed at combating greenwashing by establishing harmonised verification frameworks and imposing stringent penalties for non-compliance.
Understanding the Directive
The Directive adopts a comprehensive approach, encompassing both environmental claims and social characteristics, thereby addressing not only greenwashing but also "bluewashing," which pertains to misleading ethical and social impact assertions. An environmental claim is defined as any commercial communication, in textual, visual, or symbolic form, that implies a product or service delivers a positive environmental impact, offers superior environmental performance compared to alternatives, or demonstrates a continuous commitment to sustainability improvements. Social characteristics encompass ethical labour practices, adherence to human rights standards, diversity and inclusion commitments, and corporate social responsibility initiatives.
Key Requirements for Compliance
To achieve compliance under the Directive, businesses must ensure that all claims are substantiated by recognised scientific methodologies and up-to-date technical knowledge. It is imperative to clearly delineate whether a claim pertains to the entire product or specific components. A comprehensive lifecycle assessment must be conducted to verify that environmental benefits are significant across the product’s entire lifespan. Furthermore, transparency is critical to ensuring that positive impacts in one area do not lead to significant detriments in another. Carbon offsetting claims must specify the mechanisms used to achieve emissions reductions or eliminations. All relevant substantiation should be readily accessible through digital formats such as QR codes, hyperlinks, or physical documentation.
Who is Affected?
The Green Claims Directive is applicable to all enterprises operating within the EU market, with the exception of microenterprises that employ fewer than ten individuals and generate an annual turnover below €2 million.
Enforcement and Penalties
Enforcement of the Directive will occur at both EU and national levels, with accredited independent verifiers tasked with conducting periodic audits and compliance assessments. Non-compliance may lead to substantial financial penalties of up to 4% of annual turnover, confiscation of non-compliant products, exclusion from public procurement processes, and public exposure of regulatory breaches, often referred to as "naming and shaming."
Timeline and Next Steps
The European Commission introduced the Directive in March 2023, and full transposition into national legislation is anticipated by early 2026. However, businesses should proactively prepare for a potentially accelerated timeline, given the regulatory urgency surrounding sustainability claims.
How Fashion Brands Can Prepare
Given the fashion industry's reliance on sustainability narratives, it is imperative for brands to take proactive measures to ensure compliance. A thorough audit of all existing environmental and ethical claims at both brand and product levels is essential. Establishing robust verification protocols by engaging accredited third-party certifiers will play a crucial role in substantiating sustainability claims. Investing in sustainable practices throughout the supply chain, from sourcing to production and distribution, will not only facilitate compliance but also enhance brand integrity and market positioning.
The Opportunity Ahead
For fashion brands, the EU Green Claims Directive should be viewed not merely as a regulatory obligation but as a strategic opportunity. With sustainability-focused products experiencing growth at nearly three times the rate of conventional offerings, adherence to the Directive will reinforce consumer trust, bolster brand equity, and open new market opportunities. By embracing the Directive's requirements, forward-thinking brands can align with evolving consumer expectations and solidify their leadership in sustainable fashion.
Smart DPP is already enabling brands and retailers to stay ahead of the Directive’s compliance requirements by developing tailored digital product passports that ensure full regulatory alignment and enhance transparency across the supply chain.
