5 Things You Need to Know about Greenwashing

Greenwashing – making inaccurate or misleading statements about the environmental credentials of a product, service or business – is firmly in the crosshairs of regulators and legislators on both sides of the Channel. With new rules coming into force, expanded enforcement powers and rising litigation risks, companies need to be across the evolving landscape. Here are the five things you need to know.

The EU Empowering Consumers Directive applies from September 2026

The Directive on Empowering Consumers for the Green Transition (also referred to as the “Empowering Consumers Directive”) entered into force in March 2024 and will apply from 27 September 2026. It strengthens consumer protection against unfair commercial practices by extending the list of practices deemed unfair, including those associated with greenwashing. For example, it will be considered unfair to make an environmental claim about an entire product or business where it concerns only a certain aspect of that product or a specific activity of the business. Claiming that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions, where that claim is based on the offsetting of those emissions, is also caught. Environmental claims about future performance must be supported by clear, objective, publicly available and verifiable commitments set out in a detailed and realistic implementation plan, regularly verified by an independent third-party expert. Penalties can include fines of up to 4% of annual turnover for widespread violations across several EU Member States.

The CMA's Supply Chain Guidance emphasizes responsibility for green claims across the chain

In early 2026, the UK's Competition and Markets Authority (CMA) issued new guidance on making green claims across the supply chain. This guidance builds on the CMA's Green Claims Code and makes clear that every business in the supply chain plays a part in ensuring environmental claims are accurate. Companies could be liable for environmental claims whether they make those claims directly or indirectly by passing on information from other entities in the chain to consumers. The guidance highlights the importance of putting processes in place to obtain robust, credible and up-to-date evidence, and includes separate checklists for retailers, brands selling through third-party retailers, and for suppliers and manufacturers.

Greenwashing litigation risks are rising across Europe

Companies operating in Europe face a growing body of greenwashing case law. In October 2025, a French court ruled that TotalEnergies had deliberately made claims likely to mislead consumers about the scope of its environmental commitments (see our briefing here). The court found that TotalEnergies had led consumers to believe that purchasing its products or services contributed to a low-carbon economy, without detailing a specific implementation plan, while continuing to increase its production and investment in oil and gas. This followed recent greenwashing verdicts against KLM in the Netherlands and Lufthansa in Germany, signalling an increasingly hostile litigation environment for inadequately substantiated environmental claims.

Regulators are using AI to detect green claim violations

Regulators are deploying technology to keep pace with the volume of environmental claims being made across digital channels. In the UK, the CMA is increasingly using AI tools to sweep online communications for potentially misleading green statements, enabling it to identify and investigate suspected breaches at scale. Companies should assume that their public-facing environmental claims, including those made on websites and social media, are subject to systematic monitoring and should ensure those claims can withstand regulatory scrutiny.

Anti-greenwashing enforcement has real teeth

In the UK, the Digital Markets, Competition and Consumers Act 2024 (DMCC) has given the CMA the power to directly fine companies up to 10% of their global turnover for breaches of consumer protection law, including misleading environmental claims. This is a step change from the previous enforcement landscape, where the principal consequence of greenwashing was regulatory censure and reputational damage. The Economic Crime and Corporate Transparency Act 2023 (ECCTA) further raises the stakes. Since September 2025, ECCTA's failure to prevent fraud offence means that large organisations could face criminal consequences – and potentially unlimited fines – where certain individuals associated with the organisation commit fraud offences, such as making fraudulent green claims, intending to benefit the organisation. It is a defence for the organisation to show that it had reasonable prevention procedures in place, underscoring the importance of robust internal processes for verifying environmental claims.

For our longer briefing on the risk landscape around greenwashing, see our briefing here. For further guidance and tailored advice on greenwashing, please get in touch with Kerry Stares or with your usual Charles Russell Speechlys contact.