Green Claims Directive 2026: Managing Greenwashing Risks in the EU and Czechia

21.5.2026 | ARROWS law firm

In 2026, companies in the EU and the Czech Republic face stricter rules on environmental communications and more active enforcement. The Green Claims Directive, effective from 1 January 2025, fully applies sanctions of up to 4% of turnover. Even seemingly harmless wording can lead to multi-million fines. This article analyses legislative developments and provides guidance on how to systematically substantiate claims and minimise legal risks in line with the current requirements of the Czech Office for the Protection of Competition.

The photograph shows a specialist addressing the issue of greenwashing in marketing.

Current EU legislative framework for regulating greenwashing
Typical risks and mistakes when communicating environmental commitments
Unauthorised use of ecolabels and certificates
Strategies for safe communication of environmental commitments

Key takeaways:

A fundamental change in 2026 is the obligation to substantiate all environmental claims in detail through independent certification and transparent datasets.
In 2026, companies must update their internal ESG data processing procedures, as the new EU rules require transparent documentation of all greenhouse gas emissions calculations down to the second and third tiers of the supply chain.
In the first quarter of 2026, the Czech Office for the Protection of Competition (ÚOHS) investigated a number of greenwashing cases in the Czech Republic, with a significant share of fines imposed for general claims without quantifiable metrics or for the use of unverified ecolabels.
For companies operating in an international context, it is crucial to align their approach to environmental communications with the new EU rules, which as of 1 April 2026 also include stricter requirements for using terms such as “climate neutral” or “renewable” in digital marketing.

Current EU legislative framework for regulating greenwashing

Directive (EU) 2024/XXXX of the European Parliament and of the Council on green claims, commonly referred to as the Green Claims Directive, represents the EU’s most comprehensive instrument for combating unsubstantiated environmental claims. This directive entered into force on 1 January 2025 and, following the transposition period, became fully enforceable as of 1 January 2026 for all businesses operating within the EU. A key element is the introduction of a system of mandatory pre-market verification, which requires that all environmental claims intended for the European market be verified in advance by an accredited independent certification body.

This process includes a detailed analysis of the methodology used to calculate environmental benefits, validation of source data, and an assessment of the credibility of comparisons with common alternatives. In the event of a breach, Member States may impose sanctions of up to 4% of a company’s annual turnover, which for mid-sized businesses means fines in the tens of millions of Czech crowns.

As part of the implementation process in the Czech Republic, the Consumer Protection Act (No. 634/1992 Coll., as amended) was amended in 2025 and now contains specific requirements for environmental communications under Czech law. This amendment explicitly prohibits the use of general claims such as “eco-friendly”, “environmentally friendly”, or “planet-friendly” without a precise definition of scope and measurement methodology. The Czech Office for the Protection of Competition (ÚOHS) also published updated methodological guidance in February 2026, which defines in detail the minimum information that must be included in claims relating to CO₂ emissions reductions, material recycling, or biodiversity.

For example, a claim that a product is “made from 100% recycled material” must be supplemented with information on the source of the recycled inputs, the share of primary versus secondary materials, and a certificate under EN 15343. These rules are now regularly checked during market audits carried out by ÚOHS together with the Czech standardisation body ČSN.

The Green Claims Directive also introduces an obligation to publish so-called Product Environmental Footprint (PEF) declarations for all products and services with a significant environmental impact. This declaration must include quantified life-cycle data, including greenhouse gas emissions calculations under the GHG Protocol methodology and an analysis of impacts on water resources under ISO 14046. For Czech businesses, this requirement represents a major change, as until now many companies have used simplified declarations based on incomplete data from the first tier of the supply chain.

From May 2026, ÚOHS began announcing inspection campaigns focused on the textile industry, food production, and the energy sector, where it was found that a significant proportion of companies use emissions calculators that do not include critical factors such as emissions from raw material transport or the impact of production chemicals on soil fertility. This issue is particularly pronounced among small and medium-sized enterprises, which often do not have systems for comprehensive ESG data collection and rely on insufficiently validated supplier data.

Expanded transparency obligations under the CSRD

In addition to the Green Claims Directive, Directive (EU) 2022/2464 of the European Parliament and of the Council on corporate sustainability reporting, known as the CSRD (Corporate Sustainability Reporting Directive), also plays a key role in regulating greenwashing. This directive, which has been applied gradually since the 2024 financial year, expands its scope as of 1 January 2026 to include small and medium-sized enterprises meeting certain size criteria for reporting for the 2026 financial year (reports in 2027). The CSRD imposes increased requirements for transparency of environmental commitments and results; within annual reports, companies must disclose not only their targets but also specific key performance indicators (KPIs) that are understandable to all stakeholders.

In practice, this means that if a company communicates that it will achieve carbon neutrality by 2030, it must publish an annual, detailed progress analysis, including a breakdown of Scope 1, 2 and 3 emissions and the methodology used to offset residual emissions.

For Czech businesses, the CSRD represents a significant challenge, as it brings an obligation to implement sophisticated systems for collecting and verifying ESG data. In practice, it has become apparent that a significant proportion of Czech companies that published their first CSRD reports in 2025 did not have a fully integrated system for mapping emissions at the third tier of the supply chain. This led the Czech Office for the Protection of Competition (ÚOHS) to issue several warnings in the first quarter of 2026 to companies for insufficient transparency in communicating their pathways to carbon neutrality.

A major issue was the frequent use of unverified forecasts of future emissions without stating precise methodologies or risk scenarios, which is in direct conflict with the CSRD’s requirements for credibility and comparability of data. In addition, as of 1 March 2026 the CSRD introduces an obligation for an independent audit of the environmental sections of reports under the newly introduced ESRS (European Sustainability Reporting Standards), adding another layer of scrutiny over the accuracy of the communicated data.

New rules for digital communications and advertising

In 2026, the rules for using environmental claims in the digital environment changed significantly, in particular in connection with the amendment to the Unfair Commercial Practices Directive (Directive 2005/29/EC of the European Parliament and of the Council), as amended by Directive (EU) 2024/825 of the European Parliament and of the Council on empowering consumers for the green transition. This amendment, which became part of the Czech legal system through Act No. 289/2025 Coll., introduces specific rules for all forms of online communication, including websites, social media, and email marketing.

A key point is the ban on the use of “dark patterns” in design that may lead consumers to overestimate a product’s environmental benefits. For example, if a product webpage features a tree-leaf icon that is significantly larger and more colorful than the icon for a standard product, without clearly explaining what the environmental benefit consists of, this may be considered a manipulative element under the new rules.

In 2026, the Czech Office for the Protection of Competition (ÚOHS) has already assessed several cases in which companies used wording such as “the greenest product of the year” in digital campaigns without referencing a specific rating or certificate. Under the new rules, all subjective awards must be accompanied by a reference to an independent survey or certification process, including the methodology and the relevant time period.

In addition, the rules for using ecolabels in advertising have been tightened – as of 1 April 2026, it is prohibited to display any logos or emblems related to the environment that are not listed in the official EU Ecolabel register or in the register of approved national labels. This change has resulted in a number of Czech companies having to adjust their web presentations because they used unofficial labels such as “Green Choice” or “Eco Friendly” that were not subject to any certification process.

Typical risks and mistakes when communicating environmental commitments

One of the most common issues Czech businesses face in 2026 is a lack of a systematic approach to calculating and communicating their environmental benefits. Many companies still use simple calculators that do not reflect the complexity of a product’s full life cycle, thereby breaching the rules set out by the Green Claims Directive. A typical example is packaging production with a claim that using a lighter material reduced CO₂ emissions by 15%. This saving is often calculated solely on the basis of reduced weight, but does not include emissions from producing the new material, changes in logistics, or the impact on the packaging’s recyclability.

Under the new EU rules as of 1 January 2026, all such calculations must include a complete environmental impact assessment (Life Cycle Assessment – LCA) in accordance with the Product Environmental Footprint (PEF) methodology, which is now mandatory for all products with a significant environmental impact.

In practice, it has been shown that a significant share of Czech companies in 2025 did not use standardized system boundaries for emissions calculations, which led to an overstatement of their environmental benefits. As of 1 January 2026, the CSRD requires that all greenhouse gas emissions calculations include Scope 3 emissions across three tiers of the supply chain, which presents significant technical and organizational challenges, especially for small and medium-sized enterprises.

For example, a textile company communicating emissions reductions due to a switch to organic cotton must, in 2026, demonstrate not only emissions from cotton cultivation and processing, but also the impact of the change on water resources and biodiversity in the cultivation area. If these data are incomplete or based on inaccurate estimates, the Office for the Protection of Competition (ÚOHS) may impose a fine for greenwashing, even if the company’s effort to achieve genuine improvement was objectively present.

Another common issue is companies’ reluctance to update their environmental calculations in line with new methodological guidance. In 2026, the European Commission published an updated version of the emissions calculation tool, adding new emission factors for biomaterials and more accurate methods for assessing impacts on biodiversity. Companies that still use older versions of calculators from 2024 risk having their calculations deemed outdated and not credible.

This issue is particularly serious for companies that use internally developed emissions calculation systems without external validation. In 2026, ÚOHS has already issued several warnings to companies for using their own methodologies that were not adapted to current EU requirements, resulting in their environmental claims being classified as misleading.

Unauthorized use of ecolabels and certificates

The use of unverified or unauthorized environmental labels is another common mistake that in 2026 is leading to a rapidly increasing number of fines. While in previous years companies could rely on various private certificates, the new EU rules strictly limit the use of any environmental labels that are not listed in the official EU Ecolabel register or in the register of national ecolabels approved by the European Commission.

In the Czech Republic, the list of permitted national labels was significantly expanded in 2025; however, many companies still use labels that were originally registered before the new rules entered into force but were not transferred to the new register.

A typical example is the use of the “EcoLabel CZ” label, which was originally registered in 2020 but was not renewed in 2025 in line with the new EU requirements on transparency of certification processes. Companies that still use this label in 2026 face sanctions because the new directive explicitly prohibits the use of any labels that are not designated as official in the EU register.

This issue is particularly common among small businesses, which often do not keep track of changes in the register and rely on old certificates that are no longer compliant with current rules. In 2026, ÚOHS assessed a number of cases in which companies used non-existent or revoked certificates, and in many of them the product was immediately withdrawn from the market and significant fines were imposed.

An even bigger problem is the potential creation of proprietary labels that are deliberately designed to resemble official ecolabels but are not part of any certification system. This approach, which was common before the Green Claims Directive entered into force, is now directly prohibited and considered a misleading practice.

In 2026, the Czech Office for the Protection of Competition (ÚOHS) investigated a case involving a food company that used its own logo featuring a green tree motif and the caption “Environmentally Certified”, even though no external certification process existed. The company was fined tens of millions of CZK because the court found that the logo had been deliberately designed to mislead consumers into believing the product had undergone independent verification, which was not true.

Insufficient documentation and auditability of source data

In 2026, one of the most common reasons for greenwashing sanctions is insufficient documentation and auditability of the source data used to calculate environmental benefits. The Green Claims Directive requires all companies to ensure that all environmental claims are supported by accessible, verifiable and reproducible data, which must be archived for at least 10 years.

In practice, however, many Czech companies still use internal systems that do not record a complete history of data changes or do not provide a sufficient audit trail. For example, if a company communicates that it has reduced CO₂ emissions by 20% thanks to switching to renewable energy, it must be able to provide all relevant invoices, contracts with energy suppliers, and the methodology for converting this into CO₂ emissions, including the emission factors used.

A significant issue for Czech businesses is also the lack of standardised processes for source data quality control, especially in the supply chain. From 1 January 2026, the CSRD requires companies to audit at least 50% of tier-one suppliers annually and to implement a system for monitoring data quality among lower-tier suppliers.

However, many companies still rely on suppliers’ self-declarations without independent verification, which results in their emissions calculations being incomplete or incorrect. In 2026, ÚOHS prepared an analysis of a number of cases where companies used data from suppliers that were unable to provide supporting documentation for emissions calculations, and in many of these cases sanctions were imposed for unverified claims.

Another complication is the use of external databases and emissions-calculation software that are not compatible with EU requirements. In 2026, the European Commission published an update to the EN ISO 14064-1 standard, adding new transparency requirements for the use of secondary data. Companies using software that does not incorporate these updates risk having their calculations deemed unreliable.

For example, in the first quarter of 2026, an engineering company was sanctioned for using 2023 software to calculate emissions that did not include the new emission factors for electricity generation from photovoltaic panels. The court ruled that this methodological error led to a significant overstatement of environmental benefits, constituting a misleading claim under the new rules.

Potential issues	How ARROWS helps (office@arws.cz)
Insufficient verification of emissions calculations: Using incomplete methodologies or unverified data to support claims of CO₂ emissions reductions	We will help you with an independent review of emissions calculations under current EU standards, including an audit of source data and validation of the methodology with regard to the requirements of the Green Claims Directive and the CSRD.
Unauthorised use of ecolabels: Using non-existent or unauthorised labels that may lead to the immediate withdrawal of a product from the market.	We will ensure a legal review of all environmental labels used, advise on registration in official EU registers, and prepare a strategy for legitimate communication of green benefits.
Missing documentation for audit purposes: An insufficient trail to verify emissions calculations and other environmental indicators.	We will set up a data documentation and archiving system in line with EU requirements, including digitising processes to ensure full auditability of all environmental claims.
Insufficient supply chain control: Unverified supplier data leading to false claims about a product’s overall impact.	We will review key suppliers, propose processes for regular source data quality checks and prepare documentation for full compliance with supply-chain requirements.

Strategy for safe communication of environmental commitments

In today’s regulatory environment, it is essential to build a systematic process to verify every environmental claim before it is published. From 1 January 2026, the Green Claims Directive requires the establishment of an internal control system that must include at least three levels of verification: technical validation of the methodology, legal review for compliance with current regulations, and independent verification by an accredited provider.

For Czech businesses operating in an international context, this process is even more complex because they must also take into account the specific requirements of individual EU Member States, which may have stricter rules than the direct application of European directives.

Specifically, if a company plans to place on the market a product with a claim that it contains 30% recycled material, this figure must go through the following verification process: first, a technical analysis must be carried out to determine whether it is possible to accurately measure and distinguish the share of recycled material using available methods, such as chemical analysis or a raw-material traceability system. Then a legal review must be conducted to confirm that the wording complies with current requirements, including whether it is necessary to specify the exact type of recycling (mechanical, chemical) and whether the use of a specific certificate for recycled materials is required.

Finally, the claim must be confirmed by an independent certification body that, in 2026, is registered in the EU as a provider of pre-market verification services. This procedure is now regularly checked during market audits carried out by ÚOHS together with the Czech standardisation body ČSN.

For companies with limited capacity to implement such a system, it is important to use external expert support already at an early stage of developing environmental claims. In 2026, it is increasingly common for businesses to work with legal advisers already when designing marketing campaigns in order to avoid costly corrections and sanctions.

For example, in March 2026, ARROWS, a Prague-based law firm, helped an engineering company prepare complete documentation for a claim of a 25% reduction in the energy intensity of production, including a review of the calculation methodology, an audit of source data, and preparation of all supporting materials for independent verification. As a result, the company obtained approval to launch the campaign without delay, while a competing company that underestimated this process was exposed to a fine in the millions of CZK for the same claim without the relevant documentation.

Strategic use of certificates and transparent methods

In 2026, it is crucial to use strategically certificates that are directly recognised by the European Union and are part of the official EU Ecolabel register. While in the past many companies opted for private certificates with lower requirements, the current rules require that all certificates used to support environmental claims undergo an EU recognition process.

This process includes verifying the integrity of the certification body, the transparency of the methodology, and the real environmental impact. In the Czech Republic, interest in the EU Ecolabel and the Environmentally Friendly Product/Service label awarded by the Ministry of the Environment increased significantly in 2026, and these labels are now fully compatible with the requirements of the Green Claims Directive.

For companies that communicate complex environmental goals, such as achieving carbon neutrality, it is essential to rely on internationally recognised standards such as ISO 14064 for greenhouse gas emissions verification or ISO 50001 for energy management systems. These certifications provide not only a credible basis for communication, but also increase the auditability of internal processes.

In 2026, EU Member States began to give preference to companies that demonstrate their environmental benefits through these standardised and externally verified certifications, including in public procurement and grant programmes.

ARROWS attorneys in Prague recommend that companies develop a comprehensive environmental communications strategy based on three pillars: accuracy, transparency, and verifiability. Accuracy means using quantified data and standardised methodologies. Transparency is reflected in full disclosure of methodologies and source data. Verifiability is then ensured through independent certification and audit. Only such a strategy enables companies to communicate their environmental efforts safely while avoiding the risk of greenwashing.

FAQ

1. What is the biggest change in greenwashing regulation for 2026?
The biggest change is the full enforceability of the Green Claims Directive, which introduces mandatory prior review of all environmental claims by an independent certification agency. This significantly increases the requirements for substantiation and verifiability of all green communications.

2. What sanctions apply for greenwashing in 2026?
Sanctions for greenwashing can be very high. Under the Green Claims Directive, they may reach up to 4% of a company’s annual turnover. In addition to financial penalties, there is also the risk of product withdrawal from the market, mandatory corrective measures, reputational damage, and the risk of lawsuits by consumers or competing companies.

3. What is the difference between a “regulation” and a “directive” in the context of greenwashing?
A regulation (e.g., the Taxonomy Regulation) is directly applicable and binding in all EU Member States immediately upon entry into force. A directive (e.g., the Green Claims Directive, CSRD) sets an objective for Member States to achieve, but leaves them the choice of form and method of implementation into national law. Both have binding impacts on companies, but a directive requires transposition.

4. Do small and medium-sized enterprises also have to comply with the new greenwashing rules?
Yes. The rules of the Green Claims Directive apply to all businesses that communicate environmental claims. CSRD extends its sustainability reporting obligations to small and medium-sized enterprises (including listed SMEs) for reporting for the 2026 financial year (reports in 2027), which means that these companies must also ensure the transparency and verifiability of their environmental data.

5. How can you avoid greenwashing fines?
The key is a proactive approach. We recommend implementing robust internal systems for data collection and verification, having all environmental claims externally verified, using only official and recognised ecolabels, and regularly consulting your environmental communications with legal experts who specialise in EU legislation and Czech law in this area.

6. Why is it important to ensure proper environmental communications?
In addition to legal risks and high fines, environmental communications play a key role in building trust with consumers, investors, and other stakeholders. Transparent and truthful communication strengthens brand image, increases competitiveness, and helps attract sustainable investment. By contrast, greenwashing can lead to a rapid loss of trust and significant reputational damage.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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