Four instruments turned transparency into a legal duty

Amends the Unfair Commercial Practices Directive (2005/29/EC) to deal specifically with environmental claims. It converts several practices that previously required case-by-case assessment into outright prohibitions, listed in Annex I — meaning they are unfair in all circumstances, with no balancing test available.

Bans outright

Generic environmental claims (“eco-friendly”, “green”, “climate friendly”) where excellence in environmental performance cannot be demonstrated; claims that a product has neutral, reduced or positive environmental impact based on emissions offsetting; displaying a sustainability label that isn’t based on a certification scheme or established by public authorities.

Shifts

The burden of substantiation onto the trader making the claim.

Who is affected

Any trader making environmental claims to consumers in the EU — regardless of company size.

Why it bites

Enforcement against greenwashing was already producing eight-figure outcomes under the old framework. The per-se bans remove the arguments that previously made those cases contestable.

Reputation Index screens claims against this directive →

Requires in-scope companies to report sustainability performance using the European Sustainability Reporting Standards, covering their own operations and their value chain, upstream and downstream, on a double-materiality basis. The first CSRD-compliant reports were published in 2025.

Scope after 2025

The Omnibus simplification package substantially narrowed the population of reporting companies, with amendments limiting mandatory reporting to larger EU companies. The reporting duties themselves were not withdrawn.

The value-chain problem

A company in scope must report on suppliers who are not — which is how the requirement propagates to firms that were formally excluded.

What it demands operationally

Evidence about counterparties that is current, consistent, and traceable enough to survive assurance.

Goes beyond disclosure to duty. It establishes obligations — and legal liability — regarding adverse environmental and human-rights impacts connected to a company’s chain of activities, requiring risk-based identification, prevention and mitigation of those impacts.

The shift

From “report what you know” to “find out, act on it, and be answerable for it”.

Risk-based

Companies must prioritise where adverse impacts are most likely and most severe — which presupposes the ability to assess a chain systematically rather than anecdotally.

Also revised in 2025

The Omnibus package amended scope and timing here too; the underlying duty structure remains.

Will require products placed on the EU market to carry a digital record of their materials, composition and production, phased in by product category. It makes traceability a property of the product itself rather than a document produced on request.

What it presupposes

That a manufacturer actually knows its upstream chain — the same knowledge gap the other three instruments expose, expressed as a data requirement.

Connection to circularity

Reuse, repair and recycling models cannot be designed without knowing where materials came from and where they end up.