The Green Claims Directive, a new proposed regulation aimed at protecting consumers from greenwashing claims about the environmental attributes of products and services, has not been withdrawn by the European Commission, according to a statement provided by a Commission spokesperson to ESG Today.

The clarification followed an earlier statement from the Commission just prior to scheduled trilogue negotiations, which were subsequently cancelled, that it intended to pull the new regulation after it lost support of major political parties.

Despite clarifying that the Directive has not been withdrawn, however, the spokesperson clarified that the Commission did intend to withdraw it if microenterprises were not exempted from the scope of the anti-greenwashing proposal.

The Commission introduced the Green Claims Directive in March 2023, aimed at addressing a need for reliable and verifiable information for consumers, in light studies finding that more than half of green claims by companies in the EU were vague or misleading, and 40% were completely unsubstantiated.

The proposed directive included minimum requirements for businesses to substantiate, communicate and verify their green claims, obligating companies to ensure the reliability of their voluntary environmental claims with independent verification and proven with scientific evidence. The directive also targeted the proliferation of private environmental labels, requiring them to be reliable, transparent, independently verified and regularly reviewed, and allowing new labels only if developed at the EU level, and approved only if they demonstrate greater environmental ambition than existing label schemes.

The Commission, EU Council and EU Parliament were scheduled on June 23 to have their third trilogue meeting on the proposal. In the week prior to the schedule negotiation, however, the European People’s Party (EPP),  the largest political party in the EU Parliament, issued a letter requesting that the Commission “reconsiders and ultimately withdraws” the directive, arguing that the new rules would be overly burdensome and complex, in contrast to ongoing efforts to simplify compliance burdens on companies.

In a press conference following the publication of the letter, a Commission spokesperson said that “the Commission intends to withdraw the Green Claims proposal.”

In the statement to ESG Today, the Commission spokesperson said that including microenterprises, or companies with fewer than 10 employees and less than €2 million in revenue, in the scope of the directive would result in a very high administrative burden on the companies, in contrast with the Commission’s priority to reduce such obligations for smaller companies. There are approximately 30 million microenterprises in the EU, accounting for approximately 96% of companies, according to the Commission.

Several EU lawmakers strongly criticized the Commission’s initial statement of its intention to withdraw the directive, and the cancellation of the trilogue meeting. MEPs Anna Cavazzini, Parliament’s Chair of the Committee on Internal Market and Consumer Protection, and Antonio Decaro, Chair of the Committee on the Environment, Climate and Food Safety, said:

“This modus operandi could set a dangerous precedent for the legislative process and institutional procedures, leading to unnecessary and avoidable confrontation among co-legislators. We do not believe it is fair to deprive Parliament of the opportunity to finalise the negotiations on a directive after two years of legislative process and countless hours of work.”

Others also called into question the claim that the cancellation was due to the inclusion of microenterprises, pointing out that Parliament had already decided to remove microenterprises from the scope of the directive. In a press conference following the meeting’s cancellation, Rapporteur Sandro Gozi said:

“The mandate of the European Parliament is to exempt the micro-enterprises in the last trialogue. Our mandate, which we agreed, say that we have to obtain the exemption of the micro-enterprises, from the scope of this directive and the trilogue that should have started five minutes ago. So, I will end up here. I don’t understand why the Commission make this declaration, where, as we agree on the issue of exemption micro-enterprises.”