Greenwashing and green claims: New legal framework for sustainability communication being implemented in Germany, further tightening on EU level still unclear

As already reported in our article from 23 January 2024, the so-called "EmpCo Directive" of the EU (Directive (EU) 2024/825) came into force on 26 March 2024. All EU Member States must transpose this directive into their national law by 27 March 2026; companies have a further six months to do so. The EmpCo Directive amends the existing regulations on unfair commercial practices and consumer rights and supplements them in particular with new requirements for environmental advertising claims. As an even further-reaching step, the European Commission presented its proposal for a "Green Claims Directive" (Directive (EU) 2023/0085) in March 2023, which (as a lex specialis to the EmpCo Directive) is intended to specifically regulate the "substantiation and communication of environmental claims" (see our article from 28 March 2023).

The process of bringing the Green Claims Directive into force has not yet been finalised at EU level. The third and final date for negotiations between the European Parliament, the Council and the Commission (trilogue) was originally scheduled for 10 June 2025; according to most recent information, however, it has been postponed to 23 June 2025. Reportedly, the main point of contention between the Parliament and the Council is the procedure for the planned external prior review of environmental claims, which could be replaced by a simplified obligation to provide evidence, at least for certain environmental claims, and could possibly also be cancelled for small and medium-sized companies. The question of whether and to what extent climate claims (such as "climate-neutral", "CO2-neutral") may be based on compensation measures also continues to cause controversy. If the Green Claims Directive enters into force in its current form or in a very similar draft, the legal requirements for "green" advertising claims would likely be further tightened. In addition to the requirements of the EmpCo Directive, companies would then have to meet significantly more specific verification obligations regarding the veracity of their environmental and climate claims and proactively provide the relevant information.

A provisional agreement is expected to be reached by mid-2025. The Green Claims Directive could then be adopted in 2025 and implemented in the Member States by 2027.

While this ambitious directive is still pending in the trilogue process at EU level, greenwashing and sustainability communication are also being discussed at national level in Germany, both in legislation and in case law. The focus here is on two topics in particular: the ratio of emissions reduction to emissions compensation (especially with regard to statements on climate neutrality and promises for the future) and the topic of sustainability labelling.

German draft law to amend the UWG: Implementation of the EmpCo Directive

In December 2024, the German Federal Ministry of Justice published its discussion draft for a Third Act to Amend the Act against Unfair Competition (UWG-E). The draft is intended to implement the EmpCo Directive on a one-to-one basis to a large extent, but has been criticised in certain respects:

Section 2 (2) no. 2 UWG-E

Section 2 (2) and (3) UWG-E contain numerous new legal definitions, for example on "environmental claims" and "sustainability labels".

However, as a coalition of business and advertising associations rightly criticised in a recent statement dated 14 March 2025, the wording of the current draft goes beyond the requirements of the EmpCo Directive in some cases. For example, the new statutory definition of an "environmental statement" in Section 2 (2) No. 5 UWG-E refers to the legal concept of a "business act", while the EmpCo Directive refers to "commercial communication" in this context. The definition of a "business act" in (the remaining) Section 2 (1) No. 2 UWG is broader and covers many more activities than just "commercial communication", which in practice would mean a stricter regulation than that envisaged by the EU legislator. Although the official explanation of the discussion draft states that the statement or representation must be made or used in the context of a commercial communication, this is not clear from the current wording of the draft. It therefore remains to be seen whether the draft legislation will be amended accordingly.

Section 5 (3) No. 4 UWG-E

Section 5 (3) no. 4 UWG-E is intended to shift the relevant pint in time for assessing the permissibility of an advertising statement with an environmental promise for the future forward to the time of the purchase decision.

The wording of Section 5 (3) No. 4 UWG-E also harbours certain uncertainties regarding its scope. According to Section 5 (3) No. 4 UWG-E, a business act is misleading (and therefore inadmissible) if "it makes an environmental claim about future environmental performance without clear, objective, publicly available and verifiable commitments set out in a detailed and realistic implementation plan". It is not clear from the wording of this regulation whether only environmental statements to consumers are meant, as intended by the EmpCo Directive, or whether the relationship with all B2B market participants should also be covered by the regulation, which would then also go beyond the objective of the EmpCo Directive. There is no clarification on this in the official explanation of the discussion draft. At this point too, it remains to be seen whether the wording of the draft will be clarified.

The wording of Section 5 (3) No. 4 UWG-E would also go beyond a mere prohibition of misleading information in future, as additional duties to act and provide information would be established. For example, the required implementation plan must

"(a) include measurable and time-bound objectives and other relevant elements necessary to support its implementation, such as the allocation of resources; and

b) [be] regularly reviewed by an independent external expert whose findings are made available to consumers."

It is rightly criticised here that no qualification criteria for an external expert is set out at this point and that it remains unclear in which form the relevant information would have to be made available to the consumer. For example, the official explanation to the discussion draft provides for the possibility of using a QR code on the respective advertised product, which is not provided for in the recitals to the EmpCo Directive (recital 36 and also Article 5 (6) of the draft Green Claims Directive, on the other hand, expressly provide for the possibility of using a QR code to provide information). In this respect, it remains to be seen whether the national courts would affirm compliance with the information obligations by providing information via a QR code. There are doubts about this insofar as parts of the target group would be excluded from the information provided due to the lack of utilisation possibility.

§ Section 2 (2) No. 6 UWG-E and Annex No. 2a to Section 3 (3) UWG-E

The implementation of the EmpCo Directive will also result in drastic changes with regard to sustainability labels. With Section 2 (2) No. 6 UWG-E, the discussion draft provides for a detailed "certification system" for the legally compliant use of sustainability labels, the requirements of which go significantly beyond the previous provisions under unfair competition law and trademark law for guarantee marks, as the German Federal Bar Association, among others, has already criticised in a statement.

The most important amendment can be found in letter d) of the definition: in future, only an objective audit carried out by independent third parties in accordance with recognised international or EU standards would fulfil the requirements for a UWG-compliant certification system. This means that in future, an external authority - independent of the company and the sustainability label operator itself - must certify compliance with the sustainability label requirements. This would require a fundamental change to the business model for private providers, who have previously checked their own criteria on-site. This is because private sustainability labels and awards that do not provide for independent certification by uninvolved third parties would then no longer be permitted. So far, there does not appear to be any grandfathering exception for existing labels. According to Annex No. 2a to Section 3 (3) UWG-E, no sustainability label may be used if it does not either originate from a government agency or is not based on such a certification system. This could mean that numerous sustainability labels currently registered as guarantee marks at national and European level may no longer be used once the changes come into force.

Although the planned regulations overlap in part with the trademark law regulations on so-called guarantee marks, which can also include sustainability labels, they differ from them in key respects. For example, an obligation for independent external monitoring or the involvement of external stakeholders has not yet been provided for in trademark law. Smaller or locally operating guarantee mark systems in particular would have to significantly adapt their internal processes and their trademark statutes in order to meet the more extensive requirements of the "certification system" pursuant to Section 2 (2) No. 6 UWG-E - otherwise they would no longer be authorised to use their sustainability label.

In addition, the current draft of the Green Claims Directive also contains additional, partly stricter requirements for environmental and sustainability labels. It provides for an attestation of conformity through an additional ex-ante test and certification of sustainability labels or ecolabels and the certification system as well as a regular review of conformity. In practice, this would further complicate the adaptation of existing guarantee marks to the new legal framework and possibly affect trademark owners who - if the future requirements were not met - would have to reckon with the revocation or cancellation of their already registered trademark.

National jurisdiction: focus on transparency and resilience

While national and international legislation is still being debated, German courts have recently made several decisions on greenwashing issues. For example, in a landmark decision on 27 June 2024 (case reference: I ZR 98/23), the Federal Court of Justice prohibited advertising with the claim "climate neutral" as misleading if no explanation is provided as to whether the advertised climate neutrality is achieved through actual CO2 savings in the manufacture of the product or merely through emissions compensation.

A case brought by “Deutsche Umwelthilfe” against the technology company Apple is currently attracting a great deal of attention. In April 2024, the nature conservation organisation brought an action against Tech giant Apple before the Frankfurt am Main Regional Court for advertising a "CO2-neutral" Apple Watch with a specially designed "Carbon Neutral" logo. According to media reports, the regional court recently expressed considerable doubts about the admissibility of the advertising promise on the first day of the trial. Although a large proportion of the emissions are already avoided during the manufacture and transport of the product, the remainder is offset by nature-based compensation projects. However, it is not guaranteed that the compensation will be maintained in the long term. This is because one of the compensation projects is only secured until 2029 for the time being due to an expiring lease agreement, which in the court's view cannot fulfil the expectations of the target consumer group. The average consumer would expect the measures to reduce or compensate CO2 emissions to be secured for the longer term - for example until 2045 or even 2050 - if the climate neutrality of a product is claimed. A decision is expected at the end of August 2025.

At the beginning of 2025, the Regional Court of Cologne (decision of 21 March 2025, case reference: 84 O 29/24) and the Regional Court of Nuremberg-Fürth (decision of 25 March 2025, case reference: 3 HK O 6524/24), among others, also dealt with advertising statements on climate neutrality in connection with the compensation of CO2 emissions in other industries: In proceedings against Deutsche Lufthansa, the Regional Court of Cologne ruled that the advertising claims on "CO2 compensation" and "more sustainable flying" were misleading under the meaning of Section 5 (1) UWG. In particular, the court criticised the fact that consumers were led to believe that they could make their booked flight "climate neutral" by paying for compensation measures, without it being clearly disclosed how and to what extent compensation would actually take place.

In proceedings against the sporting goods manufacturer adidas, the Regional Court of Nuremberg-Fürth dealt with the statement "We will be climate neutral by 2050" and came to the conclusion that the challenged advertising statement was inadmissible pursuant to Section 3 (1) in conjunction with Section 5 (1) UWG. Section 5 (1) UWG, as the incorrect impression was created that the sporting goods manufacturer would be climate neutral by 2050 solely through its own emission savings and without the additional use of compensation measures.

Following the decision of the German Federal Court of Justice of 27 June 2024, both courts emphasised that advertising with climate neutrality is misleading without a clear explanation of the underlying relationship between emission reduction and emission compensation, as these are different, not equivalent measures and the reduction in relation to compensation is of greater, i.e. ultimately more valid, importance. This case law is likely to be confirmed in future versions of the UWG.

Conclusion: Case law currently the most reliable guardrail

Although the Green Claims Directive is still pending at EU level and the transposition of the EmpCo Directive into national law has not yet been finalised, German case law is already pointing in a clear direction in recent decisions:

• Green claims must be transparent, verifiable and, above all, substantiated by an actual reduction in emissions.
• Simply compensating CO2 emissions is not considered an equivalent measure for achieving climate neutrality and is therefore not a sufficient basis for making environmental pledges.
• Environmental promises for the future must be backed up by a reliable implementation plan.

Until the new legislation comes into force and its interaction is legally clarified, the current court decisions can effectively provide orientation for companies that want to advertise their products as "climate neutral" or communicate similar statements.

Those who align their advertising strategy with these standards at an early stage reduce the risk of legal disputes and at the same time strengthen their sustainability-related corporate image.