With growing environmental awareness, more companies are advertising with sustainability and “green” promises. Terms like “climate-neutral”, “environmentally friendly”, or “sustainable” aim to assure consumers of ecological harmlessness. However, if these claims are false or lack substance, it’s called greenwashing.
Greenwashing is a marketing practice that portrays a company as more environmentally friendly than it truly is. This practice damages consumer trust and can violate competition law, especially the Unfair Competition Act (UWG).
To combat misleading sustainability claims, the EU is planning a Green Claims Directive. This directive is anticipated for 2025/2026, setting Europe-wide binding rules for environmental advertising. German companies must understand how these new requirements will impact national unfair competition law.
Sustainability communication will face stricter regulation. Environmental claims must become verifiable and scientifically sound. Vague terms and self-created “eco” labels will be phased out. This article explores the upcoming EU regulations and their effects on Sections 5 and 6 UWG, addressing misleading and comparative advertising. We will also discuss how claims such as “climate neutral” or “environmentally friendly” will be restricted, how authorities will intervene, and what adjustments companies must make to their advertising and product labeling.
Greenwashing and sustainability advertising in the UWG: Current legal situation
Even under current law, environmental claims in advertising must not be misleading. The UWG (Unfair Competition Act) prohibits misleading business practices under Section 5. This includes false or misleading statements about a product’s essential characteristics, such as environmental compatibility or ecological properties.
Advertising is deemed unlawful if, for instance, it attributes environmental benefits to a product that are non-existent or significantly overstated. Section 5a UWG further prohibits the concealment of essential information. For example, a company advertising as “climate neutral” must clearly explain how this neutrality is achieved. Failure to do so can constitute misleading information by omission.
Furthermore, Section 6 UWG stipulates that all comparative advertising must be factually and objectively comparable. This means that sustainability claims, when compared with competitors, must be well-founded and not based on speculation.
German courts and supervisory authorities have actively penalized greenwashing violations. The Düsseldorf Higher Regional Court, for example, ruled on the term “climate-neutral”. While consumers understand it as a balanced carbon footprint, including offsetting, failure to clarify how this neutrality is achieved violates the Unfair Competition Act.
Without reference to offsetting measures, consumers are misled about a material fact. Similarly, the Karlsruhe Regional Court banned the drugstore chain dm from using “climate neutral” advertising without disclosing the calculation basis. Companies must provide transparent information for their environmental promises. Terms like “sustainable” or “resource-friendly” have also been prohibited when advertisers lacked scientific evidence of an actual environmental benefit.
In summary, sustainability advertising already faces strict requirements. Competition associations and consumer advice centers issue warnings against misleading environmental claims, which can lead to injunctions. For more details, consider our article on the Federal Court of Justice and “climate neutral”, which highlights courts' expectation for companies to provide concrete evidence of environmental benefits.
The EU Green Claims Directive: New Requirements for Sustainability Communication
The European Union aims to curb unsubstantiated environmental claims with the upcoming Green Claims Directive. This directive, expected to be adopted by 2025, will introduce comprehensive requirements for sustainability communication and environmental advertising. Its primary goals are to prevent greenwashing and ensure transparent, comparable environmental information. The most significant planned changes are:
- Strict Burden of Proof for Environmental Promises: Companies will need to substantiate every green advertising claim with robust evidence. Statements like “CO₂-reduced” or “environmentally friendly” will require a solid, scientific basis, such as a life cycle analysis. Blanket claims without evidence will be prohibited.
- Scientific Basis and Transparency: The methods used to substantiate environmental benefits must be robust and scientifically sound. Companies must provide precise information about the data, calculations, and criteria behind an environmental claim. Consumers should be able to access this information to verify credibility.
- Independent Verification: Environmental claims are expected to be verified or certified by independent, accredited bodies before use. This ensures external validation, preventing companies from simply self-certifying their claims.
- Ban on Misleading Buzzwords: Generic advertising phrases like “environmentally friendly”, “eco-friendly”, “eco”, or “natural” will only be permissible with concrete supporting evidence. Otherwise, such vague terms, which can mislead consumers, will be prohibited. Companies must clearly state the specific environmental benefit, e.g., “packaging made from 30% recycled plastic” instead of just “environmentally friendly packaging”.
- Restriction of “Climate-Neutral” Advertising: The widely used “climate-neutral” claim is under strict review. The EU intends to ban advertising claims about climate neutrality that rely solely on offsetting. This means a product cannot be advertised as climate-neutral if achieved only by purchasing CO₂ certificates. Terms like “CO₂-neutral” or “climate-positive” will only be allowed if based on genuine emission avoidance.
- Regulation of Sustainability Labels: The directive also seeks to regulate the proliferation of environmental labels. Companies’ own eco-labels (private labels) will be banned unless based on official certification systems or authority-recognized standards. Only sustainability labels from independent bodies, such as the Blue Angel or EU Ecolabel, would be permitted. This measure aims to protect consumers from confusing pseudo-labels and bolster genuinely trustworthy certifications.
These new requirements represent a significant paradigm shift for environmental advertising. Historically, the UWG offered a general ban on misleading advertising. However, the Green Claims Directive now establishes uniform, Europe-wide criteria for permissible environmental advertising. Following its EU-level adoption, member states will have 24 months to transpose these rules into national law. Consequently, changes will be incorporated into the German UWG or accompanying legislation by 2026. Companies should proactively prepare for these stricter transparency and verification obligations, a key aspect to avoid common legal mistakes made by start-ups.
Effects on Section 5 UWG: Prohibition of Misleading Statements is Concretized
The new EU regulations significantly reinforce the general prohibition of misleading statements under Section 5 UWG regarding sustainability claims. Previously, courts evaluated the likelihood of consumer deception on a case-by-case basis for environmental claims. Moving forward, EU rules will offer explicit guidance, deeming certain practices misleading ipso jure.
For instance, advertising “climate neutral” through certificate purchases will be legislatively classified as inherently misleading, irrespective of consumer understanding. This concretization of Section 5 UWG implies companies should not attempt to justify such borderline claims, as they will be legally inadmissible.
Moreover, a reversal of the burden of proof will become more evident. Post-directive implementation, an advertising company must be able to substantiate its environmental claims at any time. Failure to do so will constitute an unfair act. While competitors or associations previously bore the onus of demonstrating misleading claims, advertisers will now proactively ensure the accuracy and completeness of their sustainability claims. Thus, Section 5 UWG will be fortified by the specific verification requirements of the Green Claims Directive.
Practically, this means new examples may be added to UWG practice, or existing standards, like the “black list” of unfair commercial practices, will be expanded. For example, the UWG annex might explicitly ban describing products as environmentally friendly or climate-neutral without providing evidence in the same advertising medium. For companies, every unsubstantiated environmental claim automatically becomes a legal risk, underscoring the importance of understanding legal challenges for start-ups in this evolving landscape.
Effects on Section 6 UWG: Comparative Sustainability Statements
When environmental benefits are highlighted in advertising through comparison with other products or competitors, Section 6 UWG (comparative advertising) requirements apply alongside Section 5 UWG. The new EU regulations also fortify measures against unfair comparisons in this area.
A company can only claim to be “more environmentally friendly than the competition” if this advantage is objectively measurable and provable. Moving forward, comparative sustainability claims must adhere to the same test criteria. For instance, asserting 20% less CO₂ emissions than a competitor's product requires documented proof using recognized calculation methods.
Mere assertions or broad, unfair comparisons, such as “the greenest product on the market,” would be inadmissible. Positively, the directive also creates opportunities for honest comparative advertising. Companies with independent environmental certificates or demonstrably lower emissions can still communicate these facts under Section 6 UWG, provided they follow the new rules.
For example, advertising might state: “Proven 30% lower CO₂ emissions compared to the market standard, confirmed by [certification body].” Such specific, verified information would meet both the comparative principles of the UWG and EU transparency requirements. In essence, the Green Claims Directive further clarifies Section 6 UWG. It permits comparative sustainability advertising but only within strict, factually substantiated boundaries. Therefore, companies must phrase green advertising comparisons very carefully to avoid accusations of misleading or unfair advertising, much like how influencer marketing needs to be legally compliant.
Role of Competition Authorities and Enforcement
The new regulations also elevate the role of competition authorities and supervisory bodies in enforcement. Previously, greenwashing violations were primarily addressed through warnings and civil prosecution by competitors or associations like the Wettbewerbszentrale. Moving forward, state consumer protection authorities are expected to increasingly act against misleading sustainability advertising.
The EU Commission and national authorities can conduct joint “sweep checks” through the Consumer Protection Coordination Network to identify inadmissible environmental claims. Past reviews have already revealed that many “green” promises are indefensible, prompting these targeted controls.
In Germany, the Federal Cartel Office (as a consumer protection authority) or the Federal Ministry of Consumer Protection could target companies systematically advertising with unproven environmental claims. State consumer protection offices can also impose fines for UWG violations.
The EU directive's implementation is anticipated to introduce explicit sanction options. Fines up to 4% of annual turnover are being considered for serious, EU-wide breaches of the new greenwashing prohibitions. This significant penalty threat, part of the EU consumer law amendments (“New Deal for Consumers”), will likely apply where clear evidence of misleading environmental advertising exists.
Therefore, companies must not only heed warnings from competitors but also recognize that regulatory authorities can penalize greenwashing. Authorities will likely develop guidelines and assessment standards to monitor Green Claims Directive compliance. For instance, companies might be required to submit supporting documentation for environmental claims upon request. This creates a regulatory framework for checking sustainability communication. Disregarding these standards risks not only reputational damage but also tangible legal consequences from authorities, highlighting the relevance of NIS2 compliance 2025 for many businesses.
Fazit
The Green Claims Directive 2025 and its associated UWG changes mark a turning point for greenwashing advertising. Vague environmental promises and unsubstantiated sustainability slogans will soon have no place in legal advertising. While this implies more restrictions, it also presents an opportunity: genuine sustainability will be rewarded, as only seriously substantiated claims will be permitted.
Companies investing in environmental measures will differentiate themselves, while greenwashers will be exposed. For consumers, this translates into more reliable information and greater trust in “green” advertising claims.
Advertising and product labeling must adapt to these new regulations. Marketing departments should meticulously review all claims and build a solid data foundation for each statement. The guiding principle is: transparency instead of buzzwords. When uncertain, it is preferable to state specifically “This product saves 20% energy” rather than using vague superlatives like “environmentally friendly.”
This reform aligns sustainability and UWG more closely, making legally sound sustainability communication a necessity. Beyond traditional advertising, in areas like CSR reports or ESG communication with investors, the demand for honest, verifiable information is increasing.
Ultimately, the EU is curbing greenwashing and fostering fair competition. Credible advocates of sustainability will welcome the comparison. Those merely feigning “green” credentials risk reputational and legal repercussions from 2025 onwards. The effectiveness of these new rules will unfold in the coming years. However, it is clear that the advertising landscape is shifting towards greater honesty and transparency. Companies are well-advised to proactively embrace this change and make their advertising future-proof.