The European People’s Party (EPP), the EU Parliament’s largest political group, has formally called for the withdrawal of the Green Claims Directive (GCD), raising serious concerns about its potential impact on businesses striving to meet ESG and carbon neutral strategy goals. 

Introduced by the European Commission in 2023, the GCD seeks to curb greenwashing by mandating that companies back up environmental claims with scientific evidence and third-party verification. However, EPP lawmakers argue the directive imposes excessive administrative complexity, lacks a cost-benefit analysis, and threatens to undermine Europe’s economic competitiveness. 

“The GCD risks unduly hindering sustainability communication through procedures that are overly complex, administratively burdensome, and costly,” wrote MEPs Arba Kokalari and Danuše Nerudová in a letter to Commissioner Jessika Roswall. The EPP stresses that while they support consumer protection and credible environmental claims, the GCD’s pre-approval requirement for environmental marketing is unprecedented and inconsistent with existing EU internal market practices. 

The EPP warns that such mechanisms could stifle legitimate corporate efforts to communicate ESG progress and promote investments aligned with the carbon neutral strategy, instead of enhancing transparency. The absence of a thorough impact assessment further fuels skepticism around the directive’s proportionality and potential unintended consequences. 

Despite previously endorsing the Directive on Empowering Consumers for the Green Transition, the EPP now considers the GCD incompatible with broader EU goals of regulatory simplification and sustainable economic growth. With trilogue negotiations approaching, the directive’s future remains uncertain as EU institutions weigh business competitiveness against the urgent need for credible ESG disclosures. 

The outcome may set a pivotal precedent for how Europe balances anti-greenwashing measures with its ambitious carbon neutral strategy and global ESG leadership. 

Sources: 

https://esgnews.com/epp-rejects-eu-green-claims-directive-urges-full-withdrawal/ 

https://www.esgtoday.com/epp-calls-on-eu-commission-to-scrap-anti-greenwashing-legislation/