EmpCo Directive: Key Practical Questions & Answers

In our german webinar on the EmpCo Directive with our partner SAIM, we received numerous questions from practice. We've summarized the most important answers for you in this article. You can find the webinar recording here.

Who does the EmpCo apply to?

Does the EmpCo also apply to purely B2B companies?

B2B business is exempt from the EmpCo. It only applies to commercial practices involving end consumers. Still, there are good reasons to observe the EmpCo rules in B2B communication as well: these include, in particular, the risk of spillover effects, since there is often an end consumer at the end of the chain (keyword B2B2C). In addition, the EmpCo is establishing a new communication standard, for example specific rather than general environmental claims, and B2B communication shouldn't fall behind that standard either.

Does the EmpCo also apply to social sustainability claims?

Yes, the EmpCo applies equally to environmental and social characteristics. This is made especially clear in two places: the expanded misleading practices provision in Section 5 clarifies that it covers both social and environmental characteristics, and the future design requirements for sustainability labels explicitly apply to both environmental and social labels alike. Social claims are therefore essentially subject to the same rules as general environmental claims: if a company advertises a coffee as "fair" without being able to show a Fairtrade certification, that violates the requirements. Self-created social labels are no longer permitted either.

Brands, labels, and certifications

Does a brand name with a sustainability reference also fall under the EmpCo?

In principle, brand names fall under the EmpCo as well. Whether this constitutes a violation of the ban on general environmental claims depends entirely on how end consumers perceive the name: is it understood as a promise of environmental benefit? One example: the word "green" can still be used if a company sells, say, green plants, since that's clearly not an environmental claim. If "green" is understood as an implicit environmental claim, however, its use is no longer permitted.

When does a sustainability label count as EmpCo-compliant?

Sustainability-suggestive design elements, such as green leaves or a wood-look finish on plastic packaging, primarily involve labels and certifications issued by third parties, which companies can generally rely on with more confidence. That said, no blanket statement can be made, since there are also labels and certification schemes that don't meet the EmpCo standard. The European Commission has clarified in its FAQs when a label or certificate is compliant: it must be an open system with transparent criteria, and it requires three independent parties, namely a label owner, a label holder, and an independent third party acting as certifier. There must be no overlap in identity between the label owner and the auditor. It's therefore worth checking directly with the relevant institution, since many now even issue a certificate of conformity.

Are EcoVadis medals or CDP ratings affected by the EmpCo?

These are recognized third-party certificates and labels, and are accordingly uncritical.

Does the label ban only apply to B2C products?

Anything that continues to be actively placed on the market must be updated. So if a company keeps using a brochure or catalogue and continues to actively distribute and offer it, its content must be updated, just like general claims on a website. Material with a kind of "expiration date," such as a three-year-old press release, does not need to be retroactively changed.

Does every environmental claim need a label or certificate as proof?

No. The EmpCo requires environmental claims to be specific rather than general. The requirement that claims must generally be substantiated, on the other hand, isn't a new EmpCo requirement, it already applies under German unfair competition law (UWG), regardless of whether it's an environmental claim or any other claim. Substantiated means that companies can provide corresponding evidence on request or in the event of a dispute. That can be documented data, physical evidence, audits, or labels, but labels aren't mandatory for this.

General vs. specific environmental claims

When is a green claim specific enough?

It's advisable to consistently implement the EmpCo's "Big Four" everywhere, including in the sustainability report, as soon as the report or parts of it are used in other communication toward employees or customers. That means: removing or specifying general environmental claims in the report as well, no longer referring to climate neutrality at the product level, and no longer using self-created sustainability labels. Target communication, for example on CO2 reduction targets, remains somewhat more complex. Here it's advisable to either keep a clear separation, so that target communication happens exclusively within investor relations, or to focus on a small number of key targets for which external verification is obtained.

Is it enough to explain a general claim in more detail in a subordinate clause?

It's advisable to consistently implement the Big Four of the EmpCo in the sustainability report as well, as soon as the report or parts of it are used in other communication. What matters here: anyone using a general claim shouldn't simply leave it unqualified. Either the statement is made directly specific, or it stays general and is clarified within the same medium through an explanatory follow-up sentence.

Can a strategically intended claim remain in place if it's explained?

What matters for assessing any statement is solely how consumers could understand it, not how it was intended. Anyone who ensures, through sufficient specification within the same medium, that a claim is understood correctly can use it. If that isn't ensured, the claim isn't permitted.

Is a disclaimer on the website sufficient?

Basically, yes. However, the clarifying note must not be hidden away as a small asterisk somewhere, it needs to be placed clearly and visibly for the consumers being addressed.

Sustainability reporting and CSRD

Does the CSRD sustainability report need to be EmpCo-compliant?

CSRD reports are explicitly exempt from the EmpCo. However, as soon as they're used in voluntary, promotional communication toward end consumers, the EmpCo applies to the CSRD report as well.

Does the EmpCo also apply to statements from the sustainability report, for example under rule number five?

A general claim shouldn't be made unless it's specified. Instead of referring to the "sustainable cafeteria" in the sustainability report, it should say, for example, "organic options in the cafeteria," since the cafeteria itself isn't sustainable. Or instead of "sustainable mobility," specifically "our strategy for reducing emissions in the mobility sector." Using a term once and leaving it unqualified doesn't help: either the statement is made directly specific, or it stays general and is clarified in a follow-up sentence within the same medium.

Target communication, climate neutrality, and external verification

Is an SBTi validation sufficient as external verification for a climate neutrality target?

No, an SBTi validation (Science Based Targets initiative) isn't sufficient to communicate a climate target in end-consumer communication. Beyond the target itself, this requires a validated implementation plan, which SBTi doesn't currently provide.

How should companies communicate CO2 reduction targets on their website?

Anything that continues to be actively placed on the market must be updated. If a document such as a brochure continues to be actively distributed and offered, it must be updated, just like general claims in the sustainability section of a website. Documents with a kind of "expiration date," such as a three-year-old press release, don't need to be changed retroactively.

Can we rely on statements from certified management systems such as ISO 14001 or ISO 50001?

In principle, certifications are suitable for substantiating environmental claims as well as target communication. For target communication, it's sufficient if not only the target itself but also the underlying measures, or the implementation plan, have been audited.

Existing promotional materials, reports, and blog posts

Do existing catalogues, brochures, and printed materials need to be updated?

Strictly speaking: they may no longer be used, since the EU argues that companies have already had 2.5 years, since the EmpCo was adopted in spring 2024, to adapt their communication. Still, the relevant associations, which could potentially bring legal action, are signaling that they have no interest in seeing large quantities of products, packaging, and printed materials destroyed. Companies that can transparently demonstrate that they've already updated their communication, but are still using up remaining stock in one place or another, are in a considerably stronger position in the event of a legal dispute than those who argue based on remaining stock while their communication hasn't actually been updated at all. For digital communication, immediate adaptation is generally advisable, since nothing needs to be physically destroyed there.

Do already published sustainability reports need to be corrected or deleted?

No, that isn't required retroactively. The same applies to social media posts: these don't need to be retroactively deleted either. It's different if a document, such as a brochure, continues to be actively used and distributed, in that case it does need to be updated.

Does that also apply to older blog posts?

Yes, in principle anything that continues to be placed on the market is affected. If, for example, a brochure from the previous year continues to be used and is actively distributed and offered, it needs to be updated, just like general claims in the sustainability section of a website. For content with a kind of "expiration date," such as a three-year-old press release, nothing needs to be changed.