The European Green Deal and the EmpCo Directive
As part of the European Green Deal, the European Commission has developed legislation aimed at better protecting consumers from misleading commercial practices related to sustainability. Particular attention is being paid to “greenwashing”, in which companies make misleading or insufficiently substantiated sustainability claims. A key initiative in this context is Directive 2024/825/EU, also known as the EmpCo Directive. The obligations set forth therein will take effect on September 27, 2026.
Building on the Unfair Commercial Practices Directive
The EmpCo Directive builds on an existing legal framework and, in some respects, amends and strengthens Directives 2005/29/EC (Unfair Commercial Practices Directive, hereinafter: UCP) and 2011/83/EU (Consumer Rights Directive). The UCP has been transposed into Dutch law in Article 6:193a et seq. of the Dutch Civil Code. These provisions also contain the specific obligations applicable to businesses under the EmpCo Directive.
The purpose of these obligations is to enable consumers to make informed purchasing decisions. To this end, it is important for businesses to provide clear, relevant, and reliable information. Environmental claims must therefore be demonstrably honest, understandable, and reliable. This means that businesses making sustainability claims – such as “environmentally friendly,” “eco,” or “green” – will be subject to stricter regulations.
Who is subject to the EmpCo Directive?
The Directive applies to (1) businesses that sell products or services to consumers (B2C), (2) online stores and retailers, and (3) companies that use sustainability claims in advertising or marketing. The Directive has a broad scope and covers a wide range of forms of sustainability communication. Examples include packaging, product labels, websites, online stores, and advertising, as well as textual and visual communications such as brand names, trade names, certification marks, logos, and images.
Key changes introduced by the EmpCo Directive
The most significant regulatory changes resulting from the EmpCo Directive are as follows:
- Expansion of Article 6:193c, paragraph 1, of the Dutch Civil Code: This article stipulates that a commercial practice is misleading if it provides incorrect or misleading information regarding, among other things, the characteristics of a product. The non-exhaustive list of product characteristics that may be relevant in this context is expanded to include “environmental or social characteristics” and “circularity aspects such as sustainability, reparability, or recyclability.”
- Expansion of Article 6:193c, paragraph 2, of the Dutch Civil Code: Environmental claims regarding future environmental performance are permitted only if there is a detailed and realistic implementation plan setting out clear, objective, publicly accessible, and verifiable commitments, with measurable and time-bound targets and other relevant elements necessary to help achieve that plan, such as the allocation of resources, and which is regularly verified by an independent external expert, whose findings are made available to consumers.
- Expansion of Article 6:193e of the Dutch Civil Code: Information is now also classified as “essential information” for the average consumer when products are compared with one another and consumers are provided with information about environmental or social characteristics or circularity aspects, such as the sustainability, repairability, or recyclability of the products or the suppliers of those products.
- Expansion of the “blacklist” under Article 6:193g of the Dutch Civil Code: Twelve new practices are added to the blacklist, which are misleading under all circumstances.
- Do not display a sustainability label without a certification scheme or government agency;
- Do not make generic environmental claims without demonstrable evidence of “recognized outstanding environmental performance”;
- Do not make environmental claims about an entire product or business activity where the claim relates to only one aspect thereof;
- Do not make climate neutrality claims based (exclusively) on CO₂ offsetting if this is not based on the product’s actual life-cycle impact;
- Do not present legally required product characteristics as a distinguishing feature;
- Do not conceal the negative consequences of software updates;
- Do not present software updates as necessary if they only improve functionality;
- Do not market products with intentionally built-in lifespan limitations;
- Do not make false claims about a product’s lifespan;
- Do not present a product as repairable if it is not;
- Do not encourage the premature replacement of consumables; and
- Do not withhold information regarding loss of functionality when using non-original parts, accessories, or consumables.
- Precontractual information obligations under Articles 6:230l and 6:230m of the Dutch Civil Code regarding software: Traders must provide consumers with more information prior to purchase regarding the durability, repairability, and availability of software updates. In this regard, it is important, among other things, that the trader is required to inform the consumer about the duration of the manufacturer’s warranty. Additionally, the product’s statutory warranty of conformity and repairability index must be presented to the consumer in a clear and accessible manner.
- Sustainability labels: So-called sustainability labels must be based on and comply with certification schemes or be established by government agencies. Before such a label may be displayed by retailers, it must meet the applicable conditions regarding transparency and credibility. A third-party, independent, and competent entity must monitor compliance with these requirements.
Legal oversight, sanctions, and enforcement
The Netherlands Authority for Consumers and Markets (ACM) is responsible for monitoring and enforcing compliance with the new regulations. It takes an ex-post approach, acting in response to a sustainability claim made by a company.
The European Commission has indicated that it favors a pragmatic approach, so that regulators can take the circumstances of each case into account and prioritize the most significant violations. The ACM will also assess whether the company is making reasonable and proportionate efforts to comply with the regulations, including with regard to products already in the distribution chain. Documenting the steps already taken and those yet to be taken is of great importance to companies in this regard.
If the ACM finds a violation, it may impose an administrative fine or an order subject to a penalty for non-compliance. Fines can amount to up to €900,000 or, if higher, 1% of annual revenue. For violations of the blacklist, fines can amount to up to 10% of annual revenue.
What does this mean for your company?
The EmpCo Directive does not include a transition period. Existing sustainability claims are also subject to the new regime. Companies will therefore need to identify their current claims in a timely manner, assess them against the new rules, substantiate them, and adjust them where necessary.
The (new) prohibitions on the “blacklist” pose the greatest risk. In addition, it makes sense to prioritize sustainability claims that can be relatively easily adjusted, such as those on websites.
For existing packaging, some leniency may be expected, but even in such cases, it is advisable to make demonstrable and well-documented efforts to achieve compliance in a timely manner.
Would you like to know whether your sustainability claims comply with the EmpCo Directive, or do you have questions about environmental advertising or greenwashing? Please feel free to contact us.
