The EU just killed anti-greenwashing laws. Brands are celebrating, but the Consumers will pay.

The EU just killed its own anti-greenwashing law.

While you were optimizing CTR, regulators gave up on stopping fake sustainability claims.

Now brands face a choice: go transparent or go silent.

The EU Green Claims Directive was withdrawn in June 2025.
The directive would have required brands to verify environmental claims before using them.

Why it died: "Overly complex, administratively burdensome, and costly" according to the European People's Party.

Translation: Too hard to police, too expensive to enforce.

Meanwhile:

The authenticity crisis is here.

Four possible moves happen next:

A) Brands go silent—stop all sustainability claims (avoid regulation risk entirely)

B) Radical transparency wins—brands publish full supply chain data (Patagonia model scales)

C) Certification boom—third-party verification becomes the new standard

D) Nothing changes—brands find loopholes, greenwashing continues unchecked

Don't predict yet. I'm breaking down each move this week.

By Friday, you'll know which one happens first.

When regulation fails, brands face a trust crisis.
Half of sustainability claims are fake and consumers know it already.

The market corrects in one of three ways:

Or nothing changes and greenwashing becomes permanent.

The choice: authentic or silent.

Because "eco-friendly" without proof is now a liability, not an asset.

Read on for: Why the directive failed, what brands are doing now, and how this creates market opportunity.

The EU proposed the Green Claims Directive in March 2023.

The goal: Stop greenwashing by requiring third-party verification BEFORE brands could make environmental claims.

The requirement: Companies with 10+ employees and €2M+ revenue had to submit evidence for claims like:

Get it verified by accredited third parties. Or don't use the claim.

What killed it:

June 20, 2025: European Commission announced withdrawal.
June 23, 2025: Italy withdrew support. Negotiations ended.

The EPP (largest political group) said: Too burdensome for small businesses.

Translation: Pre-verification is expensive. SMEs can't afford it. So we're abandoning the whole thing.

The reality:

The directive would have fixed this. Now it's dead.

The directive's death creates a vacuum.

Scenario 1: The "Greenhushing" Effect

Some companies will stop making ANY environmental claims.
Why? Risk of litigation without clear rules.
If you can't verify claims and regulators won't define standards, safest move is to say nothing.

But:

57% of consumers willing to pay more for sustainable products.
Silence will mean leaving money on the table.

Scenario 2: The Patagonia Bet

A few brands double down on radical transparency.
Publish everything: supply chain, carbon emissions, failures, progress.
This becomes a competitive advantage BECAUSE most brands stay silent or vague.

But:

Most brands won’t do it because transparency is expensive. It requires infrastructure and to admit imperfection publicly. Most brands won't do it.

Scenario 3: The Certification Land Grab

230 sustainability labels already exist in the EU.
Without government verification, third-party certifications fill the void.
B Corp. Fair Trade. Carbon Neutral certified. EU Ecolabel. To name a few.

But:

Who verifies the verifiers? And consumers don't understand the difference between these certifications.

The pattern:
When top-down regulation fails, market-driven solutions emerge.

Either through competitive pressure (transparency wins) or through private gatekeepers (certifications).

Or brands exploit the vacuum and greenwashing continues.

If you're building a brand that makes ANY sustainability claims:

Option 1: Go Radically Transparent

Don't wait for regulation. Publish everything:

For Under 59: I could publish:

Transparency gives trust and trust is always the competitive moat.

Option 2: Get Certified (Before It's Mandatory)

Don't make vague claims. Get third-party proof.
B Corp certification. Carbon Neutral certification. Fair Trade. Organic.

The cost of certification < the cost of greenwashing lawsuit.

Option 3: Stay Silent (Strategic Pause)

If you can't verify claims, don't make them. Instead, focus messaging on:

NOT on unverifiable sustainability claims.
Because silence is better than legal liability.

What NOT to do:

Don't use vague terms like:

These are exactly the claims regulators target.

Even without the directive, existing laws still apply:
The Empowering Consumers for Green Transition Directive (adopted Feb 2024, applies Sept 2026) STILL bans:

The Green Claims Directive died, but greenwashing is still illegal.

With no pre-verification requirement, what do brands do?

Option A (Go Silent): Risk-averse brands abandon sustainability messaging entirely.

Option B (Radical Transparency): Bold brands publish everything, gain competitive advantage.

Option C (Certification Boom): Third-party verifiers become gatekeepers, brands pay for credibility.

Option D (Nothing Changes): Brands keep making vague claims, enforcement stays weak.

The directive's death doesn't end the crisis but escalates it.

Clue #1 collected.

Tomorrow: What happens when brands go completely silent (the "greenhushing" phenomenon).

Today's sources:
→ European Commission: Green Claims Overview
→ Latham & Watkins: Green Claims Directive Withdrawal
→ MHC: Greenwashing Update on Green Claims Directive
→ Plana Earth: Greenwashing Regulations
→ European Parliament: Stopping Greenwashing
→ Sweep: New EU Greenwashing Directive

See you tomorrow,
Pavan

P.S. The directive died because it was "too burdensome." But 53% of sustainability claims are still fake. Somebody's going to solve this. Who moves first?