The ECGT Directive introduces new EU rules on ESG communications. For General Counsels, it offers a legal framework to mitigate greenwashing, social washing, and reputational risks – and an opportunity to strengthen ESG governance beyond B2C compliance.
Background ECGT Directive
The European Union has moved to strengthen consumer protection against greenwashing with the Empowering Consumers for the Green Transition (ECGT) Directive. This ECGT Directive, adopted in early 2024, amends the existing EU consumer law framework — in particular the Unfair Commercial Practices Directive (UCPD) – by introducing more specific rules on environmental and social claims. While the UCPD already prohibited misleading commercial practices, the ECGT Directive sharpens this framework – as of its entry into force as per 27 September 2026 – by explicitly preventing greenwashing and social washing.
Although the legal scope of the ECGT Directive is primarily focused on business-to-consumer (B2C) commercial practices (i.e. advertising, labelling, and marketing directed at consumers), its impact may well extend beyond that. The ECGT Directive may also be relevant in business-to-business (B2B) contexts. Businesses, investors, and regulators may increasingly refer to the ECGT Directive’s framework when evaluating the credibility of ESG communications, in both B2C and B2B contexts.
Upcoming obligations under ECGT Directive’s framework
The ECGT Directive introduces the following amendments to the existing EU consumer law framework:
- Prohibition of generic environmental claims: Terms such as “eco-friendly”, “green”, or “climate neutral” are prohibited unless they are either (a) part of a certified sustainability label or (b) substantiated by recognised excellent environmental performance (such as the Ecolabel).
- Ban on greenwashing and social washing: The ECGT Directive expands the scope of misleading commercial practices to vague, unsubstantiated, or unverifiable ESG communications – including those related to circularity, durability, and reparability.
- Regulation of sustainability labels: Companies may only use sustainability labels that are based on a recognised certification scheme or established by a public authority. Self-created certification schemes or unverifiable labels are prohibited from 27 September 2026. The use of the term “sustainability” is therefore regulated.
- Introduction of certification scheme requirements: The ECGT Directive sets minimum criteria for what qualifies as a recognised certification scheme, including requirements relating to transparency, impartiality, and regular third-party verification.
- Forward-looking claims require implementation plans: Claims about future environmental performance (e.g. “net-zero by 2040”) must be supported by a detailed, realistic implementation plan, including measurable targets, allocated resources, and regular third-party verification.
- Continuous substantiation and monitoring: Companies must maintain up-to-date substantiation for all ESG communications and ensure consistency across all communications. Compliance is not a one-off check-the-box exercise but requires ongoing diligence.
- Enhanced enforcement powers: National authorities are empowered to impose significant penalties for non-compliance, including fines.
ECGT Directive’s impact in The Netherlands
While the ECGT Directive introduces a harmonised EU standard that must be implemented by Member States by 27 March 2026, it builds on a relatively mature national framework already in place in the Netherlands. Dutch law already provides a robust basis for addressing greenwashing, complemented by extensive guidance from the Dutch consumer and financial regulator (ACM and AFM) and in parallel, the Dutch advertising committees in its consistent body of decisions. Furthermore, the landmark Fossielvrij/KLM judgment, confirms that Dutch courts are also increasingly willing to assess alleged green- and social washing claims under both consumer protection and general tort law.
From compliance obligation to strategic opportunity
Against this backdrop, the ECGT Directive is more than a compliance checklist. By setting clear standards for specificity, substantiation, and transparency, the ECGT Directive helps define when ESG communications cross the line into potential misleading territory. Whether such a claim appears in a prospectus, on product packaging, or in investor disclosures, the expectation is converging: ESG communications must be specific, substantiated, transparent and consistent. This shift aligns with broader transparency developments under, for example, the upcoming CSRD and evolving market expectations around ESG integrity.
For General Counsels, the ECGT Directive presents an opportunity to embed ESG oversight more deeply into legal and compliance functions. The ECGT Directive reinforces the need for cross-functional alignment: legal, sustainability, compliance, and communications teams must work together to ensure that ESG claims are not only accurate, but also coherent across all channels. In this way, the ECGT Directive may serve as a catalyst for more structured ESG communication and risk management. By engaging with its standards proactively, businesses – and in particular General Counsels – can enhance credibility, reduce exposure to reputational harm, liability, and litigation, and respond to the growing expectations of regulators, investors, and other stakeholders. The ECGT Directive offers a coherent legal framework to demonstrate that ESG communications are not merely aspirational narratives but grounded in verifiable and substantiated commitments. We encourage General Counsels to reflect carefully on the implications of the ECGT Directive and to seek external advice where appropriate.
