Following our recent update confirming the Commission’s intention to withdraw the Green Claims Directive, the situation has further developed. On 20 June 2025, ahead of final negotiations, the Commission stated it would withdraw the proposal if no agreement could be reached on whether it should apply to companies with fewer than 10 employees.

The Commission suggested that withdrawal would only proceed if consensus could not be reached on this point. However, since an exemption for micro-enterprises had already been agreed in earlier discussions, comments from a member of the European Parliament have added to the uncertainty around the Commission’s position.

Euratex, representing the European textile and apparel sector, acknowledged the need to ease the burden on small businesses but emphasised the importance of a stable regulatory environment. They reiterated that improved supply chain transparency would support companies investing in sustainability.

As noted in our previous update, if the directive is withdrawn, the Product Environmental Footprint (PEF) will not be introduced into EU law through this channel. However, the PEF remains referenced in other legislation, including the Corporate Sustainability Reporting Directive (CSRD), and may still be incorporated into future frameworks such as the Ecodesign for Sustainable Products Regulation (ESPR).

In the meantime, companies must continue to substantiate environmental claims under the EU Unfair Commercial Practices Directive.

With Denmark now holding the EU Council Presidency, discussions may resume under a revised mandate. We will continue to monitor developments and provide updates as they unfold.

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