EmpCo is the EU’s response to the virtually rampant advertising by companies regarding the (alleged) climate neutrality, sustainability, and environmental friendliness of their products and services. The now bewildering variety of sustainability labels in the EU was also a reason for the EU to set limits on the green zeal in order to protect consumers.
In this respect, it is not surprising that the implementation of the EmpCo Directive in Germany is primarily being carried out through amendments to the Unfair Competition Act ("UWG"). For example, the newly defined term "environmental claim" is inserted into the list in Section 2(2) of the UWG, new definitions are added, the elements of misleading advertising are tightened, and the so-called "blacklist" in the annex to Section 3(3) of the UWG is expanded.
What is no longer allowed?
- General statements such as “environmentally friendly,” “green,” or “sustainable” without providing a precise definition, clarifying the scope, or providing evidence.
- Claims such as “climate-neutral” or “CO2-free” without disclosing which emission scopes are covered or what offsets or reductions have taken place.
- Misleading statements regarding net neutrality, such as “net zero” or “100% renewable,” without published, time-bound, and verifiable implementation plans.
- So-called “cherry picking,” i.e., highlighting a positive environmental impact such as “water-efficient” while simultaneously concealing significant negative impacts (e.g., high greenhouse gas emissions).
- Statements such as “environmentally friendly manufacturing process” without providing specific metrics, measurement methods, or a basis for comparison.
- The use of non-standardized, proprietary labels or seals that give the impression of independent, recognized certification.
- The omission of error margins, data quality specifications, or assumptions that substantially qualify the claim.
What should be done?
First and foremost, companies should review whether and which statements they use, whether these need to be adjusted, and what missing information must be provided.
To ensure statements remain valid, system boundaries, the reporting period, the methodology, and the verification status should always be specified. General statements should be reviewed for possible quantification (e.g., “20% reduction in Scope 1+2 emissions compared to the 2024 base year; externally verified”).
In the future, companies should refrain from advertising offsets as the sole evidence of climate neutrality. Offsets must be used in addition to actual reductions and must be made fully transparent.
If comparisons are used to make one’s own product look better, the data source, reference date, and comparison group must be specified.
Conclusion
The danger of improper greenwashing lurks everywhere. Hardly any company is likely to have such a spotless record that it is not affected by the implementation of the EmpCo. In this regard, swift action is advisable to avoid the threat of warnings and fines.
