Proposal for a Directive on substantiation and communication of explicit environmental claims (Green Claims Directive), COM/2023/166

EU directive requiring in-scope companies to report sustainability information in their management report using the European Sustainability Reporting Standards (ESRS). Omnibus I (Directive (EU) 2026/470) raised the scope thresholds to 1,000 employees and EUR 450 million turnover and added a value chain cap. The revised ESRS (Delegated Regulation (EU) 2026/1563) cut the number of mandatory datapoints and apply from FY2027.

Enforcement

Mandatory

Effective date

Wave 1 (large public-interest entities with more than 500 employees) has reported since FY2024. Member States may exempt wave 1 undertakings below the new thresholds for FY2025 and FY2026. All other in-scope EU undertakings report from FY2027 (Directive (EU) 2025/794). Third-country groups report from FY2028. Omnibus I transposition deadline: 19 March 2027. Revised ESRS enter into force 10 November 2026 and apply to financial years beginning on or after 1 January 2027; undertakings may use them for FY2026.

Covered entities

EU undertakings and parent undertakings of groups that exceed both an average of 1,000 employees and EUR 450 million net turnover (Directive (EU) 2026/470). Listed SMEs are out of scope. Third-country groups with more than EUR 450 million net turnover in the EU in each of the last 2 consecutive financial years report through an EU subsidiary or branch with more than EUR 200 million net turnover. Value chain undertakings with 1,000 employees or fewer can decline information requests that go beyond the voluntary standard (Delegated Regulation (EU) 2026/1560).

Classification system defining environmentally sustainable economic activities. Article 8 requires in-scope undertakings to disclose the share of their turnover, CapEx and OpEx that comes from environmentally sustainable activities as defined by the taxonomy. Delegated Regulation (EU) 2026/73 simplified the reporting templates, lets non-financial undertakings skip assessing activities that together make up less than 10% of turnover or CapEx, lets them skip the OpEx assessment where OpEx is not material to the business model, and simplified certain do-no-significant-harm criteria.

Enforcement

Mandatory

Effective date

Article 8 disclosures apply from 1 January 2022 (phased by environmental objective). Simplified disclosure rules under Delegated Regulation (EU) 2026/73 apply from 1 January 2026; undertakings could keep the previous rules for FY2025.

Covered entities

Non-financial and financial undertakings required to publish sustainability information under Article 19a or 29a of Directive 2013/34/EU. Under Directive (EU) 2026/470, that means undertakings and groups exceeding 1,000 employees and EUR 450 million net turnover from FY2027; Member States may exempt smaller wave 1 undertakings for FY2025 and FY2026.

Fund-level and entity-level sustainability disclosure rules for EU financial market participants and advisers. The Commission's November 2025 review proposal would create 3 product categories (sustainable, transition and ESG basics) with minimum criteria, reduce disclosure volume, and apply 18 months after entry into force. The Council and Parliament's ECON committee have adopted their positions; trilogues follow Parliament's plenary vote.

Enforcement

Mandatory

Effective date

In application since 10 March 2021

Covered entities

Financial market participants and financial advisers in the EU (asset managers, insurers offering IBIPs, pension providers, investment advisers)

Directive requiring very large EU and non-EU companies to identify, prevent and address adverse human rights and environmental impacts in their own operations, their subsidiaries' operations and their chains of activities. Omnibus I (Directive (EU) 2026/470) raised the thresholds, deleted the climate transition plan obligation, removed the EU-wide civil liability rule (liability now rests on national law), and capped fines at 3% of net worldwide turnover.

Enforcement

Mandatory once transposed

Effective date

Member State transposition deadline 26 July 2028. National measures apply to all in-scope companies from 26 July 2029; Article 16 reporting applies for financial years starting on or after 1 January 2030.

Covered entities

EU companies with more than 5,000 employees on average and more than EUR 1.5 billion net worldwide turnover, or ultimate parents of groups reaching those thresholds. Non-EU companies with more than EUR 1.5 billion net turnover in the EU in the financial year before the last. Separate thresholds apply to franchising and licensing groups (royalties above EUR 75 million plus turnover above EUR 275 million).

The Directive amends the Unfair Commercial Practices Directive and the Consumer Rights Directive to ban generic environmental claims (such as eco-friendly or climate neutral) that are not backed by recognised excellent environmental performance, and to prohibit offset-based neutrality claims and unverified future commitments. Sustainability labels must be based on certification schemes or set by public authorities.

Enforcement

Mandatory

Effective date

Transposition deadline 27 March 2026; application from 27 September 2026

Covered entities

Traders selling goods or services to consumers in the EU internal market

Operators and non-SME traders must collect geolocation data for each plot of production, conduct a due diligence exercise to demonstrate that products are deforestation-free (cut-off 31 December 2020) and produced in accordance with the laws of the country of production, and submit a due diligence statement before placing products on the market or exporting them. Member States must impose dissuasive penalties including fines of at least 4 percent of EU turnover and confiscation of products and revenues.

Enforcement

Mandatory

Effective date

Application from 30 December 2026. Micro and small operators and natural persons established by 31 December 2024 apply from 30 June 2027, except for timber products covered by the EU Timber Regulation (30 December 2026). Products added by Delegated Regulation (EU) 2026/2102 are covered from 30 December 2027.

Covered entities

Operators and traders that place on, make available on, or export from the EU market relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soya, wood) and products listed in Annex I. Delegated Regulation (EU) 2026/2102 removes cattle hides, skins and leather, retreaded tyres, soybeans for sowing, certain vulcanised rubber articles, conveyor and transmission belts, and aircraft and motor vehicle seats, and adds soluble coffee, certain palm oil derivatives and frozen cattle tongues (from 30 December 2027). Simplified obligations for micro and small enterprises and primary operators.