Green Claims: Regulatory and Litigation Focus Intensifies in the EU and UK

This article reviews the sharp escalation in regulatory scrutiny of environmental and sustainability‑related claims towards consumers across the EU and the UK, highlighting how 2026 is set to become a defining year for greenwashing enforcement.

In the EU, the upcoming Empowering Consumers for the Green Transition (ECGT) Directive, together with the Commission's detailed November 2025 Questions and Answers, introduces far stricter standards for substantiating environmental claims, restricting generic terminology, sustainability labels, and even brand or product names that imply environmental benefits without robust evidence. Member States have already intensified enforcement, targeting claims about carbon neutrality, circularity and sustainability across aviation, fashion, logistics, and consumer goods.

The article also reviews the UK's parallel regulatory tightening. The Competition and Markets Authority's January 2026 guidance on supply chain liability significantly expands corporate responsibility for environmental claims originating from upstream suppliers, while the Advertising Standards Authority continues to raise expectations through updated guidance and a series of high‑profile rulings.

Together, these developments demonstrate a clear regulatory trajectory: environmental claims must now be precise, verifiable and supported by credible evidence, and companies must strengthen supply chain due diligence, substantiation processes and internal controls to meet the heightened standards emerging across both jurisdictions.

European Union 

Investigating and addressing greenwashing remained a central priority for EU institutions and national authorities throughout 2025, and recent developments suggest scrutiny will intensify in 2026. The most consequential shift comes with the approaching 27 March 2026 deadline for Member States to transpose the ECGT Directive; the new rules will apply starting from 27 September 2026.

Against this backdrop, the European Commission's November 2025 publication of the detailed Questions and Answers, issued specifically to guide companies ahead of national transposition, marks a significant escalation in regulators' expectations around the substantiation and framing of environmental claims. Alongside this, Member State authorities have continued to advance high‑profile enforcement actions across key sectors. Businesses operating in the EU should take immediate steps to strengthen governance, lifecycle assessments and supply chain oversight.

Upcoming ECGT Directive and Publication of the Commission's Questions and Answers

The ECGT Directive introduces substantive changes to the EU consumer protection regime, amending both the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive. It targets vague or generic environmental claims (such as "eco‑friendly," "climate friendly," "green," or "gentle on the environment,") unless these are supported by recognized certification or robust, verifiable evidence.

The ECGT Directive also prohibits a few additional environmental and sustainability‑related practices, including:

• the use of sustainability labels that are not based on an independent certification scheme or not established by public authorities;
• making environmental claims about an entire product or a trader's entire business when the claim in fact relates only to a particular aspect of the product or a specific activity of the business;
• claiming, based on greenhouse gas offsetting, that a product has a neutral, reduced, or positive environmental impact; and
• presenting legal requirements applicable to all products in a given category as if they were a distinctive feature or an added benefit of the trader's offer.

These additions expand the blacklist of unfair practices under the UCPD and are intended to clamp down on misleading environmental messaging, require stronger substantiation, and ensure that consumers are not misled by marketing techniques that overstate sustainability performance.

The Commission's Questions and Answers document, published on 27 November 2025, reinforces that these are targeted amendments designed to strengthen the EU's horizontal "consumer protection safety net", complementing (not overriding) sector‑specific rules. Member States must transpose by 27 March 2026, with the rules applying from 27 September 2026, so businesses should now be remediating marketing, packaging and point‑of‑sale materials to meet the new evidentiary standards.

The Commission confirms that corporate sustainability reporting, such as annual sustainability reports or CSRD‑mandated disclosures, is generally outside the scope of the UCPD/ECGT framework, because these materials are typically mandatory and addressed to investors rather than consumers. However, the moment companies reuse any part of those reports in voluntary consumer‑facing advertising or marketing, the communication falls fully within the UCPD/ECGT regime if it contains or implies an environmental claim.

Further, the Commission reiterates that claims implying a product has a "positive or zero impact on the environment" must be assessed on a case‑by‑case basis, considering the overall commercial context, including the use of imagery, colors, symbols and layout, which may amount to implicit environmental messaging. The Commission reiterates its longstanding UCPD position that visual presentation, such as the use of green or blue color palettes, nature‑themed imagery (trees, rainforests, water, animals), or sustainability‑evoking symbols, must accurately reflect the true scale of the environmental benefit and must not overstate it. Likewise, a broad claim such as "climate‑friendly packaging" without qualification is treated as a generic environmental claim and prohibited unless supported by recognized excellence, whereas a more precise statement such as "100% of energy used to produce this packaging comes from renewable sources" constitutes a specific environmental claim and may be permissible if properly substantiated.

Importantly, the Q&A confirms that commercial practices conveyed through brand names and product names are not excluded from the UCPD/ECGT regime: if such names explicitly or implicitly convey an environmental message, they may themselves constitute environmental claims requiring full substantiation. In particular, terms such as "green," "eco," "natural," or "climate neutral" used in brand or product names may qualify as environmental claims even in the absence of explicit environmental advertising.

While the future trajectory of the Green Claims Directive (GCD) remains uncertain (see our separate alert), the ECGT framework already empowers both consumers and Member States to challenge unsupported or misleading environmental claims across sectors, leading to enforcement irrespective of  the GCD's path.

Recent EU Enforcement Actions

Across the EU, regulators and courts have escalated scrutiny of environmental and ethical claims. A selection of notable decisions illustrates the breadth of enforcement activity:

• Italy - the Italian Competition Authority (AGCM) imposed a €1 million fine on Shein for ambiguous and misleading environmental claims linked to its "evoluSHEIN by Design" collection, including overstated circularity and recyclability claims.
• Italy - AGCM imposed a €3.5 million fine on Giorgio Armani for misleading statements regarding their ethical and social responsibility commitments, which were contradicted by the actual working conditions identified at the suppliers and subcontractors.
• Germany - the Frankfurt Regional Court prohibited Apple from advertising the Apple Watch as "CO₂‑neutral", finding the claim misleading due to the limited duration of the forestry‑offset leases underpinning the neutrality assertion..
• Netherlands - the Amsterdam District Court found that KLM overstated the environmental benefits of Sustainable Aviation Fuel (SAF) and carbon offsetting, ruling its sustainability claims misleading. The court did not require KLM to rectify the claims, as the campaign was no longer running.
• EU - 21 airlines agreed to modify their environmental claims following coordinated action by the European Commission and the CPC Network. The carriers committed to stop suggesting that the CO₂ emissions of a specific flight can be neutralized, offset, or directly reduced, to avoid vague green terminology, and to ensure any sustainability‑related statements, including references to SAF, are properly substantiated and transparently explained.
• Italy - the AGCM imposed an €8 million fine on the GLS Group after finding that its "Climate Protect" environmental sustainability programme was organized, funded and promoted in a non‑transparent manner and lacked the professional diligence expected of a highly polluting sector.
• Germany - German prosecutors imposed a €25 million fine on DWS after finding that the firm made misleading statements about its environmental, social and governance investing credentials. Investigators concluded that DWS had marketed itself as an ESG "leader" and claimed that ESG was "integral" to its DNA, even though these statements did not correspond to reality.
• Belgium/Germany - FlixBus was found to have made misleading environmental claims on its Belgian website after the Belgian Economic Inspectorate identified unsubstantiated statements such as presenting its coaches as "the most environmentally friendly means of transport", promoting the environmental benefits of the FlixTrain (a service not available in Belgium), and offering CO₂‑offset options without transparency about actual emissions. After FlixBus failed to voluntarily amend its claims, the case was escalated to the German Umweltbundesamt, and on 20 February 2025, the German Federal Court of Justice definitively ruled against FlixBus, ordering the removal of the misleading claims.

United Kingdom 

Greenwashing remained a central focus for UK regulators throughout 2025, and recent developments suggest scrutiny will intensify further in 2026. While the Advertising Standards Authority (ASA) continued to issue high‑profile rulings against misleading sustainability claims across multiple sectors, the most consequential shift came with the Competition and Markets Authority (CMA)'s new guidance on supply chain liability, published on 22 January 2026. This development expands the scope of corporate exposure for environmental claims. Against this backdrop, businesses should take immediate, practical steps to review and strengthen the supply chain due diligence and governance of their environmental claims.

From an enforcement standpoint, the CMA is the UK's lead authority, equipped with statutory investigatory and enforcement powers to address misleading commercial practices, including environmental claims. The ASA, by contrast, is the independent regulator of advertising, overseeing compliance with advertising standards. Because green claims often fall within both regimes, the two regulators coordinate under a Memorandum of Understanding to manage overlapping responsibilities.

New CMA ‘Green Claims' Guidance Published January 2026 Related to Products Ultimately Supplied to Consumers

The CMA's document "Making green claims: Getting it right, across the supply chain", makes clear that companies are legally responsible for misleading environmental claims made anywhere in their supply chain - not just claims they make directly. The CMA expects businesses placing goods on the UK market to verify the accuracy of environmental representations even when these originate from, or rely on communication by, upstream suppliers, manufacturers, or distributors. In practice, the CMA intends to take a risk-based enforcement approach by focusing on the businesses that are best placed to prevent or correct misleading claims. These are considered to be the actors with the greatest control over product specifications, labeling, or consumer-facing communications.

The CMA also makes clear that, consistent with its "Green Claims Code", all green claims must be evidence-based. Businesses are expected to undertake proportionate checks on environmental information before passing it on to consumers. This includes taking reasonable steps to verify the accuracy of data provided by suppliers, especially where the claims involve technical environmental attributes.

For retailers, importers, and private label brands, particularly those relying on overseas suppliers, this raises expectations significantly. Businesses should not depend on supplier assurances at face value but should "take the necessary steps to ensure that claims are accurate and non‑misleading." They must ensure that contractual requirements, evidence gathering, and internal controls are strong enough to identify and challenge environmental information that may be inaccurate before it reaches consumers.

The timing of this guidance is significant. It arrives less than a year after the consumer‑facing provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which came into effect on 6 April 2025. These provisions grant the CMA the power to impose fines of up to 10% of global group turnover for consumer law breaches, including misleading environmental claims. This alignment of enhanced CMA powers with newly clarified supply chain responsibilities signals a heavier enforcement.

Recent ASA Guidance Updates and Rulings

In parallel, the ASA has significantly sharpened its scrutiny of sustainability‑related advertising. It has prohibited campaigns where companies overstated environmental performance or failed to provide adequate context across different sectors including:

• fashion - ASA Ruling on Supergroup Internet Ltd in respect of a paid-for Google ad stating "Superdry: Sustainable Style. Unlock a wardrobe that combines style and sustainability."
• financial services - ASA Ruling on Lloyds Bank plc concerning four ads in a sustainability‑themed campaign (a poster ad and three LinkedIn posts.)
• aviation - ASA Ruling on Virgin Atlantic Airways Ltd t/a Virgin Atlantic concerning a radio ad claiming that Virgin Atlantic's Flight 100 will become the world's first commercial airline to fly transatlantic on 100% sustainable aviation fuel.
• consumer goods - ASA Ruling on OceanSaver Ltd concerning website and TV advertisements for the company's "eco" laundry and dishwasher products, which made a series of environmental claims including "plastic‑free," "zero microplastics," "biodegradable film," and statements implying that using the products would avoid harming the sea; ASA Ruling on Dualit Ltd concerning advertising for its "compostable" coffee bags; ASA Ruling on Floor Design Ltd t/a Flooring by Nature concerning website claims that its wool carpets were a "sustainable alternative to synthetic carpets," "eco‑friendly," and that wool carpets also biodegrade at the end of their lives.

Although the ASA cannot impose fines, its reputational impact is considerable, as its findings feed directly into CMA investigations (See CMA's investigation in Simba Sleep's online sales practices), and can also be used in class actions and securities litigation risk assessments.

On 24 October 2025, ASA updated its Guidance document: "The environment: misleading claims and social responsibility in advertising.". This was followed on 20 January 2026 by further advice on environmental claims,

• "Environmental claims: General "Green" claims" - reinforcing that advertisers must ensure environmental claims are supported by robust substantiation, avoid unqualified or absolute claims such as ‘environmentally friendly,' and base broader claims on the product's full life cycle unless clearly and prominently limited; and
• "Environmental claims: Biodegradable and compostable" - focusing on real‑world evidence of degradation/composting and clear limits.

These updates reflect precedents established through the ASA's recent rulings and issue‑led reviews, and together they signal a continued tightening of expectations for how businesses substantiate and communicate environmental benefits.

Takeaways

Across both the UK and the EU, regulators are moving toward much stricter oversight of environmental and sustainability claims. In the EU, the Empowering Consumers for the Green Transition Directive and its upcoming application in September 2026 create a similarly demanding compliance environment. The ECGT Directive prohibits vague or general environmental claims unless they are backed by recognized certification or clear and verifiable evidence, and it requires more consistent information for consumers on durability, repair options, and legal guarantees. National authorities are already enforcing these standards through high profile cases involving environmental claims, climate neutrality statements, and sustainability messaging across sectors such as fashion, aviation, technology and logistics.

In the UK, the CMA guidance for 2026 and the increasingly firm approach of the ASA show that regulators are highly alert to inaccurate or unverified information, including information that originates from suppliers. Companies are expected to strengthen due diligence processes, request stronger evidence from suppliers, and introduce clearer internal controls and early escalation routes so that concerns can be identified and resolved before claims reach consumers. The ASA's recent rulings also underline that environmental statements must be specific, contextual and supported by reliable real-world evidence.

As scrutiny continues to increase during 2026, companies should ensure that every environmental claim they make, including claims that originate from within the supply chain, is thoroughly substantiated, clearly framed, and capable of withstanding regulatory, investor and judicial examination. Given normal commercial and supply chain planning cycles, businesses should therefore schedule a structured audit or review of all environmental claims during 2026 to ensure alignment with EU and UK requirements.