The “EmpCo” Directive: what changes in practice for companies

In the EU, social and environmental impact has shifted from being mainly a reputational issue to becoming a regulated field, with direct legal and operational consequences. The Green Deal package, although some of its more ambitious elements have been watered down, has introduced reporting and due diligence obligations. The adoption of Directive (EU) 2024/825, known as Empowering Consumers for the Green Transition (EmpCo), confirms this trend.

As of March 26, 2026, all companies making environmental or social claims will be required to do so with much greater transparency and verifiability.

A European framework with global implications

EmpCo amends rules on unfair commercial practices and consumer rights. In practice, it introduces new requirements affecting written communication, product design, verifiability obligations, and the use of labels and certifications.

Among the expressly prohibited practices are, among others:

• Generic statements such as eco, green, or sustainable when not backed by clear and verifiable evidence.
• Climate claims based solely on carbon offsets, without real emission reductions across the value chain.
• Exaggerations that present partial attributes (e.g., a recyclable package) as if they represented the whole product or company.
• Misleading labels or seals, created ad hoc or lacking recognized and transparent certification.

The scope is broad: any company operating in the EU and marketing products or services falls within its perimeter. Non-compliance entails legal, reputational, and trust-related risks—affecting consumers, investors, and regulators alike.

Not an isolated development

• In the UK, the CMA’s Green Claims Guidance already applies, with fines in sectors such as fashion and energy.
• In Canada and Australia, competition authorities have fined major retailers and airlines for non-transparent climate claims.
• In India, specific measures against greenwashing are being prepared.
• The OECD and the UN have strengthened their frameworks on responsible consumption, market integrity, and the fight against greenwashing.

The direction is clear: more litigation, sanctions, and pressure on corporate communication to avoid greenwashing. Regardless of the political or ideological debate on sustainability, EmpCo and the resulting judicial activity belong to the well-established field of misleading advertising and unfair competition.

How to implement EmpCo: the Dinamo voluntary standard

To support compliance, at Dinamo we have developed a Voluntary Standard for environmental and social claims in products and services, structured around 13 guiding principles. Below are some of the most relevant ones, illustrated with good and bad practices:

Principle 2.2. Claims must be specific and contextualized
✅ “Biodegradable in industrial composter within 90 days (according to EN 13432 standard).”
❌ “Biodegradable” without explaining conditions.

Principle 2.4. Comparisons must be relevant and transparent
✅ “This model reduces emissions by 20% compared to the previous one, verified under ISO 14067.”
❌ “50% greener than competitors” without verifiable data.

Principle 2.6. The use of labels must meet credibility and transparency criteria
✅ Use of the EU Ecolabel or ISO 14024 certification, with QR link to criteria.
❌ Company’s own logo designed to resemble an official seal.

Principle 2.7. Social claims must also be verifiable
✅ “Factory audited under SA8000 standard.”
❌ “Ethical production” without evidence or certification.

Principle 2.8. Claims should not be based solely on emission offsets
✅ “70% footprint reduction since 2020; residual emissions offset with Gold Standard credits.”
❌ “Zero carbon footprint” based only on buying offsets.

Principle 2.9. Advantages required by law should not be presented as differentiating features
✅ “We comply with stricter biodegradability standards than current regulation.”
❌ “Microplastic-free” in cosmetics when already required by law.

This framework offers companies a practical checklist to review claims before communicating them, avoiding common mistakes and regulatory risks.

Operational consequences for companies

EmpCo is not just a communication challenge: it has cross-cutting implications across the entire organization. It requires reviewing internal processes, responsibilities, and control systems.

Marketing and Communication

Creative teams will need to review copy, images, visual claims, and labels. The risk lies not only in falsehoods but also in misleading impressions (e.g., using green leaves or natural landscapes without technical backing). Pre-approval protocols and internal approval flows will be needed, involving marketing, sustainability, and legal departments working together.

Legal and Compliance Teams

Perhaps less visible, but critical in supporting multiple departments:

• Include warranty-of-truth clauses in contracts.
• Establish internal due diligence procedures to approve any public claim (similar to regulated sectors such as finance or pharmaceuticals)
• Develop a documentary filing system to demonstrate to regulators the evidence behind each claim (audits, certificates, lifecycle studies).
• Assess litigation risks and prepare response protocols for inspections or complaints.

Product Design

Claimed attributes must be consistent with the product’s actual features. Example: a recyclable package must actually be recyclable in the consumer’s geographic context, not only under ideal conditions. This requires close coordination between R&D, sustainability, and communication.

Supply Chain

Claims must be supported by verifiable evidence: audits, third-party certifications, lifecycle studies, official records, or public policies. The challenge will be ensuring real-time traceability, which will imply stronger pressure on suppliers and the inclusion of new contractual clauses.

From obligation to competitive advantage

Although EmpCo may initially be perceived as a regulatory burden, proper implementation is an opportunity to stand out for credibility.

Furthermore, the regulatory debate continues. The Green Claims Directive, currently under negotiation in Brussels, aims to complement EmpCo with more detailed criteria for substantiation and pre-verification of environmental claims. One notable development: the European Commission is considering excluding SMEs from its scope, opening a debate on proportionality and levels of demand.

At Dinamo, we believe this regulatory package marks a before and after in the management and communication of social and environmental impact.

If you’d like to know more about the Dinamo Voluntary Standard and understand how to apply these measures in your company, send us a private message and we’ll be happy to share it.