Anti-greenwashing in the UK, EU and the US: the outlook for 2025 and best practice guidance

The concept of “greenwashing” is becomingly increasingly commonplace. It is best described as making false or misleading statements about the environmental credentials of a product, practice or company overall, whether unintentionally, or as part of a deliberate marketing strategy.

To better protect consumers against greenwashing in a world where “going green” can significantly enhance the value of a brand or product, the EU and UK governments have been enhancing consumer protection rules. EU and UK regulators are also taking a great deal of interest. In April 2025, in a particularly high-profile example of the regulatory crackdown on greenwashing, German asset manager DWS was fined €25 million in connection with misleading statements made about its approach to ESG integration in its investment decision making.

In this Insight, we look at the latest developments and outlook in respect of anti-greenwashing measures—in particular, at how the EU approach compares to UK rules, as well as that of the United States. We also look at how companies can prepare, manage risk and look to align with best practice.

The EU - What is on the horizon for 2025?

The central pillars in the EU’s bid to tackle greenwashing are two directives: the Directive on Empowering Consumers for the Green Transition (also referred to as the “Empowering Consumers Directive”) and the proposed Green Claims Directive.

It is envisaged that these two directives, which both apply to business-consumer practices, will work alongside one another. The Empowering Consumers Directive is designed to strengthen consumer protection against unfair commercial practices and to improve the quality of information available about the environmental and social impacts of products. The Green Claims Directive complements and further operationalises the Empowering Consumers Directive by providing more specific rules on the substantiation, verification and communication of environmental claims. We discuss each of these directives below.

Empowering Consumers Directive

Entered into force in March 2024; implementing legislation by EU Member States will need to be adopted by March 2026 and the rules will have to be applied by September 2026.

This Directive is designed to enable consumers to make informed purchasing decisions and therefore contribute to more sustainable consumption practices, as well as tackle greenwashing and misleading product information. It amends the Unfair Consumer Practices Directive (UCPD) and the Consumer Rights Directive (CRD) by introducing more specific environmental and social rules, with the aim of ensuring that consumers are protected and can actively contribute to the green transition.

In addition, the Directive restricts making an environmental claim related to future environmental performance without a detailed and realistic implementation plan, and advertising benefits to consumers that are irrelevant and do not result from any feature of the product or service. It also extends the list of commercial practices which must be considered unfair, including those associated with greenwashing.

Proposed Green Claims Directive

The finalised text is expected to be agreed and adopted this year.

In its draft proposal, the Green Claims Directive would apply to:

• traders (except for micro-enterprises with a turnover under €2 million and fewer than 10 employees),
• in all industries—meaning, companies that sell goods or services to consumers, who are based inside or outside the EU, and who make voluntary environmental claims directed at EU consumers,
• voluntary claims made in business-consumer transactions – the rules do not replace or override mandatory environmental labelling or disclosures under other EU regulation, including mandatory eco design declarations, eco labelling, packaging and waste disclosures or environmental impact reporting rules.

Under the Directive, companies will need to ensure that any environmental claims they make are supported by independent, peer-reviewed and verifiable scientific evidence. It is expected that companies will need to carry out an assessment to substantiate environmental claims using robust, science-based and verifiable methods and by taking a life-cycle assessment approach (for example, by analysing supply chains and end-of-life waste management). 

The Directive envisages two approaches:

• The “general approach”, which means that any green claim would need to be verified by a third-party independent expert before being published; or
• A “simplified procedure”, which would be available to exempt certain instances of explicit environmental claims from third-party verification. Companies eligible for this simplified approach would instead prove their compliance by completing a technical document before the claim is made public. Additional support is also expected for micro-enterprises and SMEs.

The proposed Directive would also set requirements for environmental labelling schemes—i.e., certification schemes that certify that a product, a process or a company complies with the requirements for an environmental label. The proposed penalties for non-compliance are projected to be a fine of up to 4% of a company’s annual turnover in an EU Member State or any Member State concerned with the case; potential confiscation of revenues gained from non-compliant environmental claims; and/or temporary exclusion from public procurement processes.

The UK - What is on the horizon for 2025?

In the UK, there is no anti-greenwashing law as such. Instead, there is a set of laws and regulatory frameworks designed to protect consumers from misleading claims, including environmental claims, such as (i) the UK Competition and Markets Authority (CMA)’s Green Claims Code, (ii) the new powers the CMA has under the Digital Markets, Competition and Consumers Act 2024 (DMCC); and (iii) the Financial Conduct Authority (FCA)’s anti-greenwashing rule, introduced in November 2023 as part of its Sustainability Disclosure Requirements (SDR) and investment labels regime.

Consumer protection laws and regulations are supported by authoritative guidance – most notably the CMA Green Claims Code, but also the UK Advertising Standards Authority (ASA)’s codes. Similar to the EU’s proposed Green Claims Directive, the CMA’s Green Claims Code makes clear that firms should have robust, credible, relevant and up-to-date evidence available to support any claims made. It is currently unclear however precisely what evidence the CMA would accept to substantiate a claim in any investigation.

Historically, the “penalty” for greenwashing in the UK has been censure by the relevant regulator and associated bad press, but this is changing, with the CMA in particular ramping up their efforts to crack-down on greenwashing, equipped with new stronger enforcement powers.

DMCC

Received Royal Assent in May 2024 and is applicable from April 2025.

The DMCC introduces a new regime to strengthen enforcement powers in consumer protection so that the CMA can investigate and impose fines on offending businesses without needing to resort to court proceedings. Specifically, the CMA now has the power to investigate suspected breaches of consumer protection law, require undertakings from businesses to cease or modify offending conduct and directly fine companies up to 10% of their global turnover for such breaches, including misleading environmental claims. (Previously, the CMA would have had to apply to the court for an order for compliance, but that is no longer necessary in the light of the DMCC.) Effectively, the DMCC gives the CMA its own teeth.

The CMA

In April 2025, the CMA published a suite of documents setting out its approach to consumer protection.

The CMA’s new documents included (i) The CMA’s approach to consumer protection, (ii) final guidance on unfair commercial practices; (iii) unfair commercial practices: examples; and (iv) a technical note on unfair commercial practices. In the final guidance (in relation to “misleading omissions” under section 227 of the DMCC), it includes as an example of the material information which must be provided to support green claims that a company / trader must explain, “The basis on which a trader makes a claim that a product is ‘greener’ including what is meant by the term ‘greener’ and what the product is ‘greener’ than (for example, the trader’s other products or those sold by a competitor).”

Previously, the CMA had also issued a compliance guide for fashion retailers. The guide is based on the Green Claims Code and aims to drive compliance with consumer law and create a level playing field for all fashion businesses. In doing so, it will help to make sure shoppers looking to buy green can trust the claims they see. The CMA also advised 17 well-known fashion brands to review their business practices, highlighting areas of concern regarding their green claims, such as the use of broad or general terms and whether certain products are being wrongly included in “eco” ranges. The final guidance mentioned above also gives a specific example how the rules may apply in the retail industry: “A trader supplies waterproof clothing to retailers which market themselves to consumers as suppliers of sustainable ‘eco-friendly’ fashion products. The trader tells retailers that all its products are comprised of a specified minimum percentage of recycled material. Although the trader does not sell directly to consumers, the trader must ensure that any claims, statements, or representations they make to retailers are truthful and accurate because they relate to the ultimate promotion or supply of the product to consumers.”

The FCA

Anti-greenwashing rule came into effect in May 2024; related “naming and marketing” rules began to apply in December 2024 however limited temporary relief was granted until April 2025.

The FCA’s Sustainability Disclosure Requirements (SDR) and investment labels regime was designed to prevent investment firms from overstating the green credentials of their products to customers. It comprises an anti-greenwashing rule, voluntary sustainability labels, rules around the use of certain sustainability-related terms and mandatory disclosures. The framework was constructed to tackle greenwashing in the UK financial market by increasing transparency, fostering a fair market and protecting institutional investor interests regarding sustainability claims while ensuring that such claims are fair, clear, and not misleading. It also seeks to establish accurate and well-defined naming and marketing standards for investments.

In general

It will be interesting to see how the CMA’s new enforcement powers play out in practice over time. In the meantime, all the signs point to the CMA continuing actively to use the regulatory tools at its disposal to crackdown on businesses making misleading environmental claims. The breadth of sectors to which anti-greenwashing regulation will apply is also likely to increase.

The US

The Federal Trade Commission (FTC) is the primary federal agency responsible for protecting consumers and enforcing laws against deceptive marketing practices. Similar to the UK’s CMA’s Green Claims Code, the FTC has  the Green Guides as best practice guidance, which applies to claims in both business-consumer and business-business transactions. The FTC can act if marketers make environmental claims that are inconsistent with the Green Guides. In such an action, the FTC must prove that the challenged act or practice is unfair or deceptive in violation of Section 5 of the Federal Trade Commission Act. This does not replace or override other federal, state, or local laws related to greenwashing, although compliance with those laws will not necessarily prevent FTC enforcement.

The Green Guides were last updated in 2012; it was expected that they would be updated in late 2024, including a greater crackdown on superficial environmental claims, but those updates are now uncertain.

Like the UK’s FCA, the U.S. Securities and Exchange Commission (SEC) also is charged with monitoring and cracking down on misleading marketing practices by investment firms in the US. The SEC has long been at the forefront of combating greenwashing claims, bringing numerous enforcement actions including against large consumer goods companies. Toward the end of 2024, however, the SEC disbanded the Climate and ESG Taskforce, and it remains to be seen which way the agenda will go in the Trump presidency.  

On a state level, California has been a leader in climate  legislation, including on anti-greenwashing, with the Voluntary Carbon Markets Disclosures Act (VCMDA) which came into effect in January 2024. The VCMDA requires entities to make public disclosures designed to increase transparency and accountability around climate-related claims and the use of voluntary carbon offsets. The VCDMA applies to companies that make claims within California relating to achievement of net zero emissions or to carbon neutrality, meaning that non-US entities are also caught. If caught, entities must disclose certain information relating to the greenhouse gas emissions associated with its claims.

How should companies prepare and manage risk relating to regulation of greenwashing?

It is clear the landscape of anti-greenwashing initiatives in the EU, UK and elsewhere is developing apace. Understanding the high-level general approaches to anti-greenwashing globally will help companies keep on top of the latest law, regulation and guidance, and focus on best practice within their businesses across global supply chains.

The following are some pointers to consider when making green claims:

• The basis of the environmental claim made must be clear.

A high level of understanding by the intended audience should not be assumed; it should be clear if the promoted green benefit will only result from specific action or behavioural change by the consumer. Companies must also be cognisant of the fact that a reader’s concern for the environment may vary and someone who is particularly concerned about the environment may be more susceptible to misleading environmental claims than those who have no interest in environmental issues. Therefore, it is advised that claims are tailored to the most “vulnerable” groups to help protect against claims more effectively.

• The claim must be adequately substantiated: this requires robust documentary evidence to prove all claims, whether direct or implied.

It is acceptable to describe a product as “greener” or “friendlier”, but only if the basis for the comparison, either with a competitor’s product or a company’s own previous product, can be justified.

• The claim must state any significant limitations and qualifications.

Relevant qualifying information should be provided in an easily accessible manner so that a consumer can see it and take account of it before making any decision to purchase the product.

• The claim must be based on the full lifecycle of a product or, if not, be clear as to what part of the product lifecycle is referred to.

Claims such as “100% eco-friendly”, “less plastic” and “zero emissions” are considered full lifecycle claims unless it is made clear otherwise; these terms should not be used without qualification. An advert must not mislead about the product’s (or brand’s or company’s) total environmental impact. Terms like “environmentally friendly” should therefore be used with caution.

• There is a low understanding and lack of consensus as to what “carbon neutral” or “net zero” mean to the consumer.

It is therefore important to:

• explain the basis for any such claims;
• include accurate information about the degree to which carbon emissions are being actively reduced to ensure that claims based on future goals relating to reaching “net zero” or achieving “carbon neutrality” are based on a verifiable strategy to deliver them; and
• ensure that claims based on carbon offsetting are supported by information about the offsetting scheme that is being used.

As will be clear from the above, the regulatory, litigation and reputational risks for companies around greenwashing are multiplying. Businesses must carefully consider what statements they make about environmental impact in the context of the complex risk environment.

For further guidance and tailored advice on greenwashing legislation or anything else discussed in this briefing, please get in touch with kerry.stares@crsblaw.com or with your usual Charles Russell Speechlys contact.