The European Commission is poised to scrap its plans for greenwashing regulation, as the draft Green Claims Directive has been withdrawn from talks this week. It follows a request from conservative lawmakers last Wednesday (18th June) to kill the proposals.
The Green Claims Directive was announced in 2023[i] with the intention of preventing companies from making unsubstantiated assertions about their carbon footprint and other environmental impacts. Last week the centre-right EPP group and the nationalist ECR demanded that the proposals be dropped, with EPP lawmaker Arba Kokalari stating: "Industry, environmental, and consumer organisations have all criticised the proposal, which lacks an impact assessment and contradicts the core principle of better regulation”[ii].
A statement then followed on Friday from the EU executive's spokesperson, Maciej Berestecki, who said: "In the current context, the commission intends to withdraw the Green Claims proposal"[iii].
With the final round of talks on the Green Claims Directive scheduled to begin today, it left many wondering if planned votes would go ahead. However, a spokesperson for Poland, which holds the EU's rotating presidency, then confirmed this morning (23rd June) that negotiations would be cancelled between EU countries and lawmakers: "We are hitting the pause button," the spokesperson said. "There are too many doubts, and we need clarity from the European Commission on its intentions - based on that we can decide on the next steps."[iv]
Euractiv has also reported that Italy withdrew its support for the draft EU law over the weekend, dealing a further blow to the beleaguered legislation. The European Commission had already threatened to withdraw the Green Claims directive unless negotiators in the Council of the EU and the European Parliament agreed to exempt micro-enterprises from its scope.
The recent news on the Green Claims Directive follows earlier amendments to two other major pieces of legislation in what environmentalists’ fear is a ‘watering down’ of sustainability regulation[v].
In April the EU announced that businesses would be given more time to meet their obligations for both the Corporate Sustainability Due Diligence Directive (CSDDD), and the Corporate Sustainability Reporting Directive (CSRD). It followed publication of the ‘Omnibus Simplification Package’ earlier this year which aims to boost the EU’s competitiveness.
The CSDDD is regulation which will impose sustainability and human rights due diligence standards on firms operating within the EU, and the CSRD will require businesses in the EU to disclose their environmental and social impacts.
In a vote held in spring MEPs overwhelmingly voted to support delays to the above pieces of sustainability legislation. It means that the deadline for EU countries to enact the CSRD into national law will be pushed back by a further year, moving the deadline to July 2027. Subsequently the deadline for compliance for companies currently under the directive’s scope will also be pushed back.
As a result, EU companies with more than 5,000 employees and net turnover higher than €1.5 billion, as well as non-EU companies with a turnover above this threshold who operate within the EU, will be granted until 2028 to comply, while SMEs will be required to submit sustainability reporting in 2029.
Further, the CSDDD has been given a one-year extension, providing EU member states with additional time to transpose and apply the directive into national law.
[ii] EU executive kills anti-greenwashing bill ahead of final talks - Euractiv
[iii] EU plans to scrap anti-greenwashing rules after pushback
[iv] EU halts talks on law tackling companies' fake 'green' claims
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
