UK B Corps & the EU’s directive on empowering consumers for the green transition: using the B Corp logo in EU markets

The Directive on empowering consumers for the green transition (“ECGT”) creates new provisions within EU consumer protection law that, among other points, prohibit businesses from making unsubstantiated generic claims about their environmental performance and requires them to provide certain information to consumers, to enable consumers to make more sustainable purchasing decisions. The ECGT also prohibits businesses displaying sustainability certification marks (“sustainability labels”) issued by voluntary certification schemes unless those schemes meet certain criteria. Although the ECGT amends EU law, UK companies can be caught by the rules if they are doing business within EU Member States.

In particular, UK B Corps operating in the EU should be considering how the new rules on sustainability labels could interact with their B Corp certification. In this article, we provide an overview of some of the key provisions of the ECGT and discuss what it may mean for B Corp certification.

What is the ECGT and how will it affect UK businesses?

The ECGT is part of the European Commission’s wider Circular Economy Action Plan, which is one pillar of the EU’s Green New Deal agenda. Broadly, the ECGT requires traders to provide certain pre-contract sustainability-related information to consumers (e.g., regarding the reparability and durability of goods), and prohibits unfair commercial practices that could hinder consumers in making more sustainable purchasing decisions (e.g., greenwashing). EU Member States must adopt legislation to implement the measures introduced by the ECGT, and apply them by 27 September 2026.

After this date, UK businesses that market their products to consumers in the EU may be subject to claims and regulatory action in those EU countries if they breach the national laws that implement the ECGT. This is the case despite any clauses in the business’ terms and conditions of sale that may try to specify the application of UK law or the jurisdiction of UK courts.

UK businesses that are not selling into the EU will not be within scope of the reforms made by the ECGT. The UK recently updated its consumer protection law in the Digital Markets, Competition and Consumers Act 2024 (“DMCC”). Unlike the ECGT, the DMCC does not make specific reference to environmental claims or other sustainability aspects. During the DMCC’s progress through Parliament, legislators indicated that they considered that UK consumer protection law already contains measures to tackle greenwashing. Despite a different legislative approach, it is possible that UK regulators (particularly, the Competition and Markets Authority and the Advertising Standards Authority) will not want a significant gap to open between enforcement in the EU and the UK. It is possible that, in practice, there may not be a great difference between what is required of business-to-consumer (“B2C”) communications in the EU and UK markets as UK markets adopt a similar stance to the EU.

What are sustainability labels under the ECGT?

The ECGT defines “sustainability labels” as “any voluntary trust mark, quality mark or equivalent, either public or private, that aims to set apart and promote a product, a process or a business by reference to its environmental or social characteristics, or both, and excludes any mandatory label required under Union or national law”. The ECGT introduces a prohibition on displaying a sustainability label unless it is based on a voluntary “certification scheme” or established by public authorities.

Sustainability labels issued by a certification scheme can only be displayed in EU markets if the scheme meets certain requirements. If the requirements are not met, displaying the scheme’s mark would constitute a commercial practice that shall in all circumstances be regarded as unfair, in all Member States. These requirements include that the monitoring of the trader’s compliance with the scheme’s certification criteria be subject to an objective procedure and carried out by a third party whose competence and independence, from both the scheme owner and the trader, are based on international, EU or national standards and procedures.  

What does this mean for UK B Corps? 

The B Corp certification mark appears to fall within the ECGT’s definition of a sustainability label. B Corp is a voluntary certification scheme that is intended to set apart and promote B Corp businesses, and their products, by reference to the business’ environmental and social impact credentials. B Lab’s ‘theory of change’ states that B Corps are part of a movement toward “a world where business is a force for good, and plays a leading role in positively impacting and transforming the global economy into a more inclusive, equitable, and regenerative system”.

To date, the verification of businesses’ applications for B Corp certification is carried out by B Lab itself and, therefore, not by suitably qualified third parties, as is required to meet the new certification scheme requirements under the ECGT. However, B Lab states that its new certification process, under its recently revised certification standards, “will comply with applicable regulations, including Empowering Consumers for the Green Transition (ECGT – Directive 825/2024/EU), effective September 2026”, with all certification decisions to be made by a third party, and that B Lab is “working to create certification pathways to enable companies to be certified on the new standards and certification model by September 2026”.

B Lab recommends that “all businesses that operate within the EU and engage in business-to-consumer (B2C) communications should start self-assessing against our new standards and start identifying and working towards meeting the standards, to ensure readiness for when such a pathway becomes available”. It also recommends that “that businesses that operate within the EU and engage in business-to-consumer (B2C) communications should consult their own legal advisors regarding how they communicate their B Corp status after September 2026”. UK B Corps are invited to complete an online form so that B Lab UK can contact them with further guidance on the ECGT and any impact it may have on the business’ B Corp certification.

In summary, a UK B Corp that operates B2Cbusiness within EU countries may be in breach of the relevant Member States’ consumer laws, by carrying out an unfair commercial practice, if from 27 September 2026 it displays its B Corp mark without having recertified under B Lab’s new certification process. If it does not recertify, it would be prohibited from displaying the B Corp certification mark because it would have been issued without third-party verification under the outgoing B Corp certification process.

Other considerations for B Corps in the ECGT

The ECGT introduces further amendments to EU consumer protection law, including relating to environmental claims (what businesses say about their environmental impact) and the repairability and durability of goods. UK B Corps operating in EU markets will need to comply with these new rules. We summarise below some of the other key requirements introduced by the ECGT.

• Generic environmental claims – Making generic claims about the environmental performance of goods will be prohibited, as an unfair commercial practice, unless those claims are substantiated. Such claims can be substantiated by reference to compliance with the EU eco-labelling scheme (which has a statutory basis) or the ISO 14024 (‘Environmental labels and declarations’) standard, or by corresponding to top environmental performance for a specific environmental characteristic in accordance with other EU laws. Where a claim is sufficiently specific, it will not be a ‘generic’ environmental claim. For example, compare a general statement about “climate-friendly packaging” with a product that states, on its packaging, that “100% of the energy used to produce this packaging comes from renewable sources”, which would not be a generic claim.
• Misleading information regarding environmental and social characteristics and circularity aspects – EU consumer protection law includes a list of product characteristics in relation to which a trader’s practices can be considered misleading, due to the information provided or the way it is presented to consumers. The ECGT adds to this list by specifically including “environmental and social characteristics” and “circularity aspects”.
• Claims relating to future environmental performance – Such claims may include statements about the business becoming climate neutral by a certain date. These types of claims may be considered misleading if they are not supported by a clear, detailed and realistic implementation plan. The plan should include measurable and time-bound targets and other relevant elements necessary to support implementation, and be regularly verified by an independent third-party expert, whose findings are made available to consumers.
• Environmental performance based on offsetting – The ECGT prohibits claims that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions where this is based on offsetting. Examples of such claims may include ‘climate neutral’ or ‘climate net zero’. This type of claim may be permitted if the claim is based on the actual lifecycle impact of the goods, rather than on offsetting emissions outside the product’s value chain.
• Information that must be provided to consumers – The ECGT requires traders to provide certain pre-contact information. For example, traders must provide clear information about certain commercial (i.e., not required by law) guarantees of durability, if provided by producers. Traders must not withhold information or make false claims aboutthe durability of goods, including regarding early obsolescence features where such information is available to the trader, or about the necessity or functionality of replacing parts or accessories. Traders must provide consumers with any information provided by producers in relation to the repairability of goods, and must not present a product as allowing repair if it does not. Information must also be provided regarding the availability of environmentally-friendly delivery options. In relation to digital services, traders must tell consumers for how long the provider has committed to providing certain software updates, if such information is available to the trader, and cannot withhold information aboutthe negative impacts of software updates.

Preparing for the new rules

There are steps that UK B Corps marketing to EU-resident consumers can take, to help prepare for the implementation of the ECGT. For example:

• Begin work to meet the new B Corp certification standards, so the business is ready when B Lab announces its anticipated recertification ‘pathways’ under the new certification process.
• Identify the claims the business makes about its own, and its products’, environmental performance, in marketing and other materials that are made available to EU consumers. Identify any claims that may be considered ‘generic environmental claims’ under the ECGT or that relate to future environmental targets.
• Identify all certification marks that the business uses (not just B Corp) on its products and communications, which promote the business or its products by reference to sustainability performance. Check whether the relevant certifying scheme meets the criteria introduced under the ECGT, including the need for third-party verification.
• Review whether the business’ claims are substantiated, collate the evidence upon which the business relies to substantiate its claims, and identify any gaps.
• Check that the pre-contract information required under the ECGT is clear and provided to consumers in the necessary format, such as in relation to product guarantees and repairability.

What other changes may be on the horizon in this area?

The EU Commission announced that it has halted negotiations on the anticipated ‘Green Claims Directive’. The draft directive would require businesses to substantiate their ‘explicit environmental claims’ in B2C commercial practices by complying with certain requirements, including using third-party verification (with exemptions available) and complying with rules around offsetting regarding climate-related claims. While some MEPs have criticised the move, others have argued that the proposed requirements could undermine the competitiveness of European businesses. The draft directive has not yet been withdrawn, but it is unclear whether it will go forwards. Although they are part of the same legislative agenda, currently, it does not appear that halting the Green Claims Directive has brought the ECGT under scrutiny. However, alongside the proposed Omnibus reforms to the EU’s key sustainable finance legislation, we will be watching with interest for further developments on the EU’s sustainability agenda.

Bates Wells provides advice on advertising and consumer law for B Corps and other purpose-driven businesses, and we would be happy to advise on the implications of the ECGT. If you’d like to know more, please get in touch.