Compliance teams have long focused on data privacy, anti-corruption, and trade sanctions. Now, sustainability claims are becoming a compliance issue too. The EU's Empowering Consumers for the Green Transition Directive (EmpCo) turns environmental marketing into a legal matter, with member states required to apply national rules by Sept. 27, 2026.
These myths persist because sustainability communications have traditionally been outside the compliance function. Marketing handled messaging, sustainability teams managed data, and legal reviewed only the riskiest claims. EmpCo changes that division of labor. Here's what your compliance team needs to unlearn.
Myth 1: "If it's technically true, we can say it"
Reality: A factually correct statement can still violate EmpCo if it creates a misleading impression.
Consider a product where only the packaging contains recycled material. The statement "contains recycled material" is technically accurate. But if it suggests the entire product is recycled, it's prohibited under EmpCo. The directive bars presenting an environmental benefit related to one aspect of a product as if it applies to the whole product or business.
This matters for your review process. You can't just verify the fact; you need to assess how the average consumer will interpret the claim in context: the visual presentation, surrounding text, product category, and what's emphasized versus what's in fine print.
Your substantiation file should document not just the data supporting the claim but also the rationale for its presentation and why it's not misleading.
Myth 2: "Generic terms like 'eco-friendly' are safe because everyone uses them"
Reality: EmpCo targets generic environmental claims and sets a high bar for their use.
Expressions like "environmentally friendly," "green," "sustainable," or "responsible" can't be used just because your company has some positive environmental initiative. Under the directive, a generic claim must be supported by recognized excellent environmental performance relevant to the claim. Alternatively, you must clearly specify what the claim means where it appears.
This creates a choice for compliance teams: either substantiate that your product or service genuinely represents excellent environmental performance in a recognized framework, or replace the generic language with specific, verifiable statements.
"Climate-friendly packaging" is a generic claim. "Packaging produced using 100% renewable energy" is specific. The specific version may still need substantiation, but it doesn't face the hurdle of demonstrating excellent environmental performance.
Your compliance framework should flag generic environmental language for enhanced review and require either documentary evidence of excellent performance or a rewrite to specific claims.
Myth 3: "We can use carbon offsets to claim climate neutrality"
Reality: EmpCo prohibits product-level climate neutrality claims based on offsetting.
Companies may not claim that a product has a neutral, reduced, or positive impact on the environment in terms of greenhouse-gas emissions when based on offsetting. The EU considers such statements misleading because they imply the product itself doesn't have an adverse climate impact.
This doesn't mean you can't invest in carbon-credit projects or communicate those investments. You can, provided the information isn't misleading. What you can't do is translate those investments into a product-level neutrality claim.
Your compliance team needs to distinguish between communications about corporate climate initiatives (which may reference offsets) and claims about a product's environmental impact (which cannot rely on offsets to assert neutrality).
If "carbon neutral" or "climate neutral" language appears on packaging, product descriptions, websites, or advertising for specific products, and that claim rests on offsetting, it requires immediate review and likely revision.
Myth 4: "Our sustainability targets are corporate strategy, not compliance issues"
Reality: Public commitments to future environmental targets are regulated under EmpCo.
Forward-looking claims, including commitments to achieve climate neutrality, net zero, or another environmental objective by a future date, may be misleading if not supported by clear, objective, publicly available, and verifiable commitments. You must have a detailed and realistic plan showing how targets will be achieved, including resource allocation. Progress must also be verified regularly by an independent third-party expert whose findings are available to consumers.
This requirement extends beyond marketing copy. An environmental promise may depend on investment decisions, technological developments, operational transformation, and emissions reductions across several business units. Your compliance framework needs to examine not only the wording of the claim but also whether the organization has a credible route to delivery.
A corporate ambition shouldn't be presented as an achievable commitment if the organization hasn't established a realistic plan with assigned ownership, resources, and monitoring processes.
Myth 5: "This is a marketing problem, not a compliance risk"
Reality: Noncompliance can result in fines of at least 4% of annual turnover in affected member states, plus operational and reputational consequences.
For widespread infringements with an EU cross-border dimension, member states must provide for maximum fines of at least 4% of the trader's annual turnover in the member states concerned. Where turnover information is unavailable, national law must provide for a maximum fine of at least €2 million.
But the economic exposure extends beyond fines. A prohibited claim may require you to stop a campaign, revise websites and sales materials, change product packaging, or defend litigation across several jurisdictions. Misleading claims may also create disputes with customers and business partners and increase scrutiny of related sustainability disclosures.
Reputational consequences can be even more severe. Greenwashing allegations directly challenge the credibility of the organization. If your company can't support a public sustainability promise, stakeholders may question not only the claim itself but also the reliability of management, the effectiveness of internal controls, and the integrity of the broader sustainability strategy.
What to do instead
Build a governance framework that treats sustainability claims the same way you treat financial disclosures or regulatory filings. Before publication, you should be able to demonstrate what evidence supports a claim, whether the wording accurately reflects the scope of that evidence, who approved it, and how changes in data or business performance will be monitored.
Establish a cross-functional review process that includes marketing, legal, sustainability, and compliance. Higher-risk claims (climate-neutrality statements, future targets, generic environmental language, and comparative claims) should receive enhanced scrutiny.
Create a substantiation file for each claim that documents the underlying data, the methodology, the scope and limitations, the approval chain, and the monitoring plan. This isn't just documentation for its own sake. It's your defense file if the claim is challenged by a regulator, consumer organization, competitor, or court.
The central question is no longer simply whether a sustainability statement is attractive or broadly consistent with corporate ambitions. The question is whether it's legally permissible, factually supportable, and capable of withstanding external scrutiny.
