The Use of So-Called Sustainability Labels Under the EmpCo Directive

Directive (EU) 2024/825 on empowering consumers for the green transition (the so-called “Empowering Consumers” or “EmpCo” Directive) brings significant changes to environmental advertising.

The new requirements, which apply exclusively in the B2C sector – that is, wherever businesses interact with consumers – and are implemented through a revised version of the Unfair Competition Act (UWG), will take effect on September 27, 2026. As things stand, no transition period is planned, not even for products already on the market.

Anyone who engages in environmental advertising or intends to do so in the future and wishes to continue operating in the market in compliance with the law as of September 27, 2026, should familiarize themselves with the new rules now at the latest and, where necessary, take appropriate measures.

I. Scope of Application

The amendment to the UWG introduces several categories of environmental business practices, each of which is subject to its own set of regulations.

Specifically, this applies, among other things, to:

• “general environmental claims,” which, due to a lack of specification in the same medium, pose a particular risk of misleading consumers;
• “sustainability labels,” which in the future must be based on a certification system or be established by the government;
• “future environmental performance,” i. e., statements regarding environmental performance not yet achieved that are linked to a robust implementation plan;
• statements regarding the “offsetting of greenhouse gas emissions,” which will be prohibited in all product-related contexts in the future.

As part of our HEUKING series on the aforementioned practices covered by the EmpCo Directive, Part 1 dealt with “general environmental claims” (available here). This article now focuses specifically on the regulations regarding sustainability labels.

II. Sustainability Labels

In the EmpCo Directive (and the future Section 2(2)(4) of the Unfair Competition Act (UWG), as amended), a “sustainability label” is defined as 

“a voluntary public or private trust mark, quality label, or similar, intended to highlight or promote a product, process, or business activity with regard to its environmental or social characteristics, or both, excluding all mandatory labeling under Union or national law.”

In short, sustainability labels are therefore, in particular, voluntary trust labels or quality marks that serve to highlight or promote the environmental or social characteristics of a product, process, or business activity.

Due to the broad definition, depending on the intended use, overall context, and consumer perception, even nature-related elements (e. g., green leaves or water droplets next to a text element or logo) can be considered sustainability labels and thus fall within the scope of application.

Sustainability labels serve a trust-building function for consumers. Consumers should be able to trust that the specific characteristic advertised by a sustainability label is actually present.  This function of instilling trust is regularly not fulfilled when companies use their own sustainability labels. The provisions of the EmpCo Directive therefore aim to ensure the transparency and credibility of sustainability labels and to put a stop to the proliferation of private sustainability labels.

As of September 27, 2026, it will therefore be prohibited to display sustainability labels that are neither based on a so-called certification system nor established by government agencies.

In cases where the use of a sustainability label is linked to commercial communication that gives the impression that a product has a positive or no impact on the environment or is less harmful to the environment than competing products, this sustainability label should also be regarded as an environmental claim under Recital 8 of the EmpCo Directive.

1. Government-established sustainability labels

Examples of government-established sustainability labels include the EU Ecolabel introduced by the European Commission, the “Blue Angel” label as the German federal government’s environmental label, and the “Green Button” label of the Federal Ministry for Economic Cooperation and Development. These are subject to strict monitoring by government regulatory authorities.

If a sustainability label has been established by a government agency, it may continue to be used in the future. If the sustainability label was not established by a government agency, it must be based on a certification system.

2. Certification System

“Certification system” is defined in Section 2(2)(6) of the UWG (Unfair Competition Act), as amended, as

“a system of third-party verification that confirms that a product, process, or business activity meets certain requirements, that enables the use of a corresponding sustainability label, and whose terms and conditions, including its requirements, are publicly available and meet the following criteria:
a) the system is open to all businesses under transparent, fair, and non-discriminatory conditions,
b) the system’s requirements are developed by the system owner in consultation with appropriate experts and stakeholders,
c) the system establishes procedures for addressing non-compliance with the system’s requirements and provides for the withdrawal or suspension of the entrepreneur’s use of the sustainability label in the event of non-compliance with the system’s requirements, and
d) monitoring of an entrepreneur’s compliance with the system’s requirements is subject to an objective procedure and is carried out by a third party whose competence and independence from both the system owner and the entrepreneur is based on international or Union-wide standards and procedures or on standards and procedures of a Member State of the European Union.”

A certification system is therefore a formalized verification and monitoring system designed to certify products, processes, or business activities against established criteria. It constitutes the basis for the lawful use of a sustainability label.

The audit required under the system must not be conducted by the party whose product, process, or business activities are being audited, but must be carried out by an independent third party. This is intended to strengthen the “transparency and credibility” of the certification system and, consequently, of the sustainability label (Recital 7 of the EmpCo Directive). Mere self-certification therefore does not meet the requirements for a certification system. 

A distinction must therefore be made between three parties involved:

• The system owner, who designs, operates, and is responsible for the respective certification system. This individual establishes the system’s requirements and conditions. This means that they specify the criteria for awarding a sustainability label and the conditions under which such a label may be used.
• The third party, independent of the certification program owner, who performs monitoring tasks and verifies compliance with the requirements set forth in the certification system.
• And finally, the certified business that is permitted to use a sustainability label based on the certification system.

The conditions of the certification system, including the requirements for the products, processes, or business activities that must be met for certification, must be publicly accessible. In this regard, easy accessibility to the public is required, for example through publication on freely accessible websites. Conversely, it is insufficient if the conditions and requirements are only available after prior registration and/or sign-up or are provided solely upon individual request.

3. What applies to test seals and trademarks?

It remains unclear whether test seals (Stiftung Warentest, Öko-Test, etc.) also qualify as sustainability labels. In principle, even a logo that primarily serves to promote test results may be perceived by consumers as a recognized seal or quality mark.

Currently, however, it is generally assumed that neutral consumer tests are not covered by the scope of application. Due to the fact that the assessment is made from a consumer’s perspective, uncertainty remains in individual cases as to when a test seal – which, while not primarily focused on sustainability, nevertheless includes sustainability aspects – can be considered a sustainability label.

The German statutory text contains no explicit exception for trademarks. According to the legislative rationale, however, the concept of a sustainability label must be interpreted narrowly from a teleological perspective and covers only marks that, from a consumer’s perspective, appear to be an independent confirmation of certain sustainability characteristics. Pure indications of origin are therefore generally not intended to fall under this definition (BT-Drs. 21/3327, p. 19). Accordingly, trademarks are generally not sustainability labels; according to the legislative history, an exception may apply at most to warranty marks.

While the European Commission shares the basic premise that traditional trademarks are not automatically classified as sustainability labels, it rejects a blanket exclusion based on the form of the trademark and always requires a case-by-case assessment. Furthermore, it points out that trademarks – regardless of their legal classification – can function as environmental statements if their name or design contains relevant references.

In practice, this therefore typically involves two stages of examination: First, it must be clarified whether the sign appears as a sustainability label, second, it must be examined independently of this whether the trademark name can be understood as an environmental statement. For companies operating throughout the EU, it is advisable to follow the Commission’s positions, as they set the stricter standard.

III. What are the consequences of violating the EmpCo?

Violations of the provisions of the EmpCo Directive or the version of the UWG effective as of September 27, 2026, are primarily pursued by consumer and competition associations as well as eligible competitors. In practice, this entails, in particular, costly cease-and-desist letters and, if an out-of-court settlement is not reached, preliminary injunctions and injunctive relief actions.

As a result, non-compliant goods may become unsellable, and potential claims for damages and the risk of reputational damage must also be taken into account.

IV. Recommendations for Action and Outlook

The implementing regulations for the EmpCo Directive present companies with significant legal and practical challenges. There is not much time left before the new provisions of the UWG take effect on September 27, 2026. Companies should therefore ensure in a timely manner that, for example, products or product packaging as well as their websites no longer feature unauthorized sustainability labels or unauthorized environmental advertising claims by that date.

It is to be expected that, once the new legal framework takes effect, consumer protection and competition associations in particular will strictly monitor compliance with the new regulations and consistently pursue violations – typically through costly cease-and-desist letters.

In upcoming posts, we will take a closer look at further aspects of the EmpCo Directive, particularly the new requirements for statements regarding future environmental performance and the implications of the ban on CO2 offset claims.

We are happy to assist you in the timely implementation of the new UWG rules and will continue to help you communicate your commitment to sustainability in a legally compliant manner.

This article was written in collaboration with our research assistant Franziska Klinzing.