EU to Ban “Climate Neutral” and Other Misleading Sustainability Claims 

Brought to you by the Profit with Purpose Magzine

Most companies are busy putting energy and resources into turning the wheel of their operation towards more sustainable business practices, measuring their environmental footprints and announcing sustainability strategies and pledges. 

However, when it comes to communication, fighting greenwashing and deciding what is true and what is false regarding sustainability messages has become a major challenge for consumers, investors and other stakeholders. 

According to the latest directive approved by the EU Parliament, new rules are coming to ban misleading advertisements and provide consumers with better product information from 2026. 

This directive will hit hard on commercial communication using “generic environmental” claims or adopting questionable green marketing approaches with a set of rules aimed at combatting greenwashing and helping consumers make better purchasing choices. 

Highlights of the new regulation coming: 

• Generic environmental claims and other misleading product information will be outlawed. 

• Only sustainability labels based on approved certification schemes or established by public authorities will be allowed. The new regulation will banish the use of terms such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral”, or “eco” without proof of recognised excellent environmental performance relevant to the claim. 

• Guarantee information has to be more visible, and a new guarantee extension label will be introduced. 

To combat misleading messages regarding a company or product’s carbon footprint that has become extremely popular, the new regulations will also ban claims based on emissions offsetting schemes that a product has a neutral, reduced or positive impact on the environment. 

With these changes coming, businesses must be prepared to have authentic and credible verification based on approved certification schemes or established by public authorities of any sustainable message they use regarding their products, services or the company. 

Besides fighting greenwashing, the directive will also push commercial organisations to make guarantee information more visible, as many people are unaware that all goods enjoy at least a two-year guarantee in the EU. 

Member states will have 24 months to transpose it into national law upon final approval from the EU Council, which is more of a formality at this stage of progressing this legislation. 

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