Clifford Chance

As greenwashing claims rise, German courts and upcoming EU Directives are redefining the legal terms of marketing with green claims, particularly the term "climate neutrality", across industries. This blogpost elaborates on the recent court rulings, the forthcoming regulation and the key terms of marketing with green claims.

Greenwashing Cases and Legal Framework

In an era where sustainability has become a key selling point, companies across industries are eager to brand themselves as climate-conscious. These claims are closely monitored by civil society and indeed competing businesses who have raised accusations of exaggerated or misleading claims about the ecological performance or benefits of products or services, commonly referred to as greenwashing. This development has led to a ruling of the German Federal Supreme Court ("Bundesgerichtshof", "BGH") on the use of the term "climate neutrality" which in turn has influenced the lower court rulings in similar greenwashing cases.

BGH Ruling On a Confectionary Manufacturer

The BGH set strict standards for environment-related advertising, citing the high risk of misleading consumers. In a notable case, a confectionary manufacturer labelled its product packaging as 'climate neutral', including a link and QR code for further information about climate protection projects with a 'Climate Partner'. A competition association challenged this, arguing it implied that the products were manufactured without emissions. The manufacturer contended that consumers understood climate neutrality as also being achieved through emissions offsetting.

The BGH sided with the plaintiff, ruling that the term 'climate neutral' is misleading unless the advertising clarifies whether neutrality is achieved through actual emission reductions or merely through compensations. This decision was based on section 5(1) of the German Act against Unfair Competition ("Gesetz gegen den unlauteren Wettbewerb", "UWG"), which prohibits misleading commercial practices that could influence consumers' decisions. The Court emphasized the need for clarity and accuracy in environmental terms and labels, especially given consumers' heightened environmental awareness. Terms like 'climate neutrality' can imply either emission reductions or compensation, which are not equivalent. The Court stated that emission reductions are preferable compared to mere compensation, and advertisements must clearly indicate how neutrality is achieved. External references like links or QR-codes are insufficient.

Ruling of instance courts against other major German companies

Recently, a German NGO challenged a global sportswear company's claim on its website, that it would achieve climate neutrality by 2050. While the statement outlined emission reduction targets for 2025 and 2030, it did not clarify whether these would be met through actual emission reductions or through external carbon offsetting programs. In March 2025, the Regional Court of Nuremberg ruled in favour of the NGO, finding the claim unsubstantiated and misleading under section 5(1) UWG. The Court concluded that the company failed to explain how it would achieve climate neutrality, especially beyond 2030, and whether it would rely on actual emission reductions or offsetting schemes. This coincides with the BGH's above finding according to which the manner of achieving "climate neutrality", i.e. whether emissions are reduced or merely compensated, must be transparently recognizable from the advertisement.

In another case, a German environmental NGO brought a greenwashing lawsuit against a German aviation company. The NGO claimed that the airline's claim, which stated that customers could offset their CO₂-emissions, was misleading. On 21 March 2025, the Regional Court of Cologne ruled in favour of the NGO, finding the airline's advertising lacked the required transparency under section 5(1) UWG. The Court concluded that the stated emission offsetting was insufficient to support a claim of climate neutrality, as the advertisement lacked transparency about how CO₂ compensation was calculated and what portion of emissions was offset for the booked flight. The Court emphasized that such claims deceive consumers into believing their flights are environmentally harmless if they pay extra. This ruling aligns with the BGH's stance that advertising must not only specify whether emissions have been reduced or offset, but must also provide transparency and accuracy regarding the scope and method of offsetting mechanisms.

This year alone, German NGOs have filed similar lawsuits against several companies, including a leading technology firm, international cosmetics and fashion companies and building material retailers. These cases are currently ongoing.

What's Coming: EU Directives on Green Claims

German greenwashing litigation coincides with recent EU initiatives: In March 2024, the EU adopted the 'Empowering Consumers for the Green Transition Directive' ("EmpCo Directive"), to be transposed into national law by March 2026. This directive blacklists certain advertising practices, including generic environmental claims, sustainability labels (unless backed by independent certification schemes or established public authorities), and environmental claims based on offsetting schemes or concerning only to certain aspects of a product or business activity. Unqualified terms like 'eco-friendly' or 'green' will be banned without verifiable evidence. The new catalogue of prohibited practices will be implemented in the German UWG.

Alongside the EmpCo Directive, the proposed 'Green Claims Directive' aims to introduce additional requirements. If adopted, it will require companies to substantiate environmental claims with verified, science-based information. However, it is currently unclear if the 'Green Claims Directive' will be adopted by the European legislator and, if so, in which form. This uncertainty is related to the recent environmental Omnibus package, which aims to streamline EU Green Deal regulations, possibly including the Green Claims Directive.

Conclusions:

The recent German court rulings provide insight into the strict assessment of environmental claims under German law. Most notably, the BGH clarified that consumers generally interpret the term 'climate neutrality' as referring to actual emission reductions, not just offsetting. This places a heightened burden on advertisers to ensure such claims are not only accurate but also clearly explained in the advertisement itself.

The Regional Court of Nuremberg reinforced this standard: long-term neutrality goals must rest on concrete, verifiable plans. General commitments without clarity on whether they rely on reductions or offsets fall short of the legal requirements under section 5(1) UWG.

Following the decision of the Regional Court of Cologne, advertisements must transparently disclose the scope and methodology of offsetting, even when offsetting is explicitly mentioned. Vague or incomplete references to compensation schemes are insufficient and risk misleading consumers.

These national developments align with the EU's legislative agenda and the latest interpretation of EU law by other European courts (see blog post here on the interpretation of the EU UCPD by a Netherlands Court regarding the environmental advertising campaign and carbon offsetting program of a Dutch airline). The EU legislator aims to codify these principles at the European level, banning unqualified environmental claims and setting a standard of scientific substantiation for all green marketing. Together, these initiatives signal a clear trend: environmental advertising must move beyond aspirational language and embrace transparency and precision.