EU Greenwashing Rules: Compliance Obligations for Czech Companies

The European Union is tightening its rules against greenwashing. The new legislation introduces strictly enforceable requirements, with the risk of substantial fines. During 2026, Czech companies will face specific obligations regarding environmental marketing and substantiating sustainability claims. This article provides a clear overview of what the new regulations mean in practice and how to properly set up internal processes in line with the recommendations of our Prague-based law firm.

Key impacts of the new regulation

From the perspective of management and business owners, the key point is that environmental marketing is no longer merely a reputational issue, but increasingly also a matter of regulatory and litigation liability. The European Commission states that a significant share of green claims on the market are vague, misleading, or unsubstantiated.

In practical terms, this means companies need to recalibrate all sustainability communications—from packaging and e‑shops to ESG reports. Each specific claim must be accurate, clear, reflect the entire life cycle, and be supported by reliable, scientifically substantiated data.

At the same time, the risk of inspections by national supervisory authorities, consumer class actions, disputes brought by competitors, or pressure from investors and NGOs is increasing, as shown by the growing number of greenwashing disputes across Europe.

Why you cannot avoid greenwashing today, even if you “don’t mean any harm”

Greenwashing is a situation where a business presents its products, services, or the company as a whole as more environmentally friendly than they actually are. Regulators do not examine whether it was intentional fraud; they assess the impact on consumers and the potential to mislead them.

In practice, this may involve exaggerated, selective, or insufficiently explained information that creates an impression of significant sustainability, even though in reality it is only a marginal improvement.

A typical example is the use of general terms such as “eco”, “bio”, or “sustainable” without it being clear what exactly they refer to, or whether the claim is supported by solid data. Similarly problematic are claims about recyclability where packaging may be technically recyclable, but under real market conditions it cannot be commonly recycled.

Greenwashing also includes situations where a business highlights a partial environmental benefit but conceals that the substitute material has a comparable or worse impact at other stages of the life cycle.

It is important to realise that today environmental marketing is assessed not only by consumers, but also by investors, financing banks, and rating agencies, which view greenwashing as an indicator of weak risk management, a threat of future sanctions, and a risk of a serious reputational crisis.

Research confirms that exposing greenwashing leads to a sharp decline in trust in the entire company and may strengthen active brand rejection by customers.

Another factor is the rapidly growing volume of regulatory requirements. If you need to set up internal processes and responsibilities so that marketing claims withstand scrutiny, it may be practical to draw on experience from commercial and litigation disputes as well. The European Commission emphasises that without reliable and verifiable green claims, consumer behaviour cannot be effectively steered towards a more sustainable economy. In addition to traditional consumer protection, a comprehensive sustainable finance framework is also gaining ground.

Both of these sets of rules are intended to protect investors from greenwashing in financial products.

Czech companies therefore must take into account that greenwashing is not only a marketing issue, but also a matter of compliance, financing, and strategic risk management. Our attorneys in Prague see in practice that greenwashing disputes today are often preceded by a combination of pressure from regulators, investors, and NGOs. Preventively setting up environmental marketing is usually significantly cheaper than subsequent defence in court or administrative proceedings.

Practical risks also include how a “green” message may be assessed as misleading in a specific communication channel, as discussed in the update Paper business offers in companies: When marketing communication may pose a legal risk.

Overview of the new European regulation of environmental marketing

The cornerstone of the fight against greenwashing in the EU is the Unfair Commercial Practices Directive, which prohibits the use of misleading information as well as misleading omissions towards consumers. This directive is transposed into Czech law by the Consumer Protection Act and is also reflected in the general regulation of unfair competition in the Civil Code.

The European Union built on this general framework by adopting the Directive on empowering consumers for the green transition. Member States are required to transpose this directive into national legislation by 27 March 2026, with the new rules applying across the EU from 27 September 2026.

This new regulation expressly adds specific types of greenwashing to the blacklist of prohibited practices. In practice, it is also worth ensuring that contractual relationships with agencies, distributors, and suppliers of supporting materials are properly addressed, typically through contracts and negotiations. For example, the use of general environmental claims such as “environmentally friendly”, “ecological”, or “green” is prohibited unless the business can demonstrate the product’s excellent environmental performance.

The directive also significantly tightens the rules for using sustainability labels. Going forward, only labels based on an independent certification scheme or established by public authorities will be permitted on products. This effectively bans internal logos created by companies themselves without transparent criteria and independent oversight.

Of fundamental importance is the new legislation’s approach to climate neutrality claims based on offsets. Specific recommendations on how to communicate environmental commitments so that they are verifiable and minimise the risk of sanctions are also summarised in the update Greenwashing under EU scrutiny: How to communicate environmental commitments without the risk of multi-million fines. The new rules expressly prohibit claims that a product has a neutral, reduced, or positive environmental impact if the claim is based on the purchase of carbon credits rather than on real emissions reductions.

A company may inform customers that it invests in environmental projects, but it must not present a product as “carbon neutral” on the basis of such purchases. Our Prague-based law firm therefore recommends, in practice, an urgent audit of all claims of neutrality, emissions reductions and offsets before autumn 2026.

Direction of the Green Claims Directive

In parallel with the consumer protection reform, the European Union has prepared a specialised directive on substantiation and communication of explicit environmental claims ( Green Claims Directive ). This proposal aims to set uniform rules on how voluntary environmental claims must be scientifically substantiated in advance.

Under the proposal, every explicit green claim will have to be based on a comprehensive assessment and obtain a certificate of conformity in advance from an independent certification body. All supporting documentation will then have to be made accessible to consumers, for example via a QR code on the product packaging.

The EU legislative process in 2026 continues within the trilogue between the European Parliament, the Council of the EU and the European Commission. Both the European Parliament and the Council of the EU have confirmed broad political agreement on the need for prior verification of environmental claims, although simplifications for small and medium-sized enterprises are being discussed.

Even before formal adoption, the principles of this directive are already becoming the standard. Supervisory authorities and courts take them into account when interpreting the existing rules on misleading commercial practices, which Czech companies should not underestimate.

Other relevant European regulations

Environmental marketing cannot be viewed in isolation from the broader ESG and sustainable finance framework in the EU. A significant role is played by the Sustainable Finance Disclosure Regulation (SFDR), which requires financial institutions to transparently inform about how they take sustainability risks into account.

Another key instrument is the Taxonomy Regulation on sustainable activities, which introduces a uniform classification of activities meeting environmental criteria. If a company claims that its projects are “green”, it should base such claims on the objective criteria set out in this taxonomy.

We should also mention the voluntary EU Ecolabel scheme. Obtaining this official EU label guarantees compliance with strict environmental standards verified by an independent body. For companies, it represents a safe harbour, as products bearing this label are not exposed to the risk of being accused of greenwashing.

microFAQ

1. Do companies have to change their marketing campaigns immediately?
The basic prohibition on misleading consumers already applies today. The specific and strict prohibitions arising from the directive will become fully enforceable from the end of September 2026; however, preparing new packaging and communication strategies takes months. It is therefore essential to start auditing and adjusting environmental claims well in advance.

2. How should companies approach the draft Green Claims Directive when it has not yet been approved?
Although the directive has not yet been finally transposed, it is advisable to implement its core principles into internal processes already now. This will prevent the company from having to make further costly changes to marketing and product documentation in the future.

Which rules on environmental marketing will apply to Czech companies

The Czech legal system already contains effective tools to combat greenwashing. The key regulation is the Consumer Protection Act, which prohibits the use of misleading commercial practices. A misleading practice includes providing factually incorrect information, but also providing truthful information if it may create a false impression for the consumer.

A breach of this act may result in a fine imposed by the Czech Trade Inspection Authority (Česká obchodní inspekce) of up to CZK 5,000,000. In the case of serious cross-border infringements with an EU-wide impact, the fine under European rules may amount to up to 4% of the company’s annual turnover.

The second pillar is the regulation of unfair competition in the Civil Code. The use of unsubstantiated green claims may constitute misleading advertising or misleading designation of goods and services. Competitors may seek a court order requiring the company to cease such conduct and remedy the unlawful situation.

In the area of advertising, the Advertising Regulation Act is also important, under which misleading advertising is prohibited. Regional trade licensing offices may impose fines for misleading advertising of up to CZK 2,000,000. The European Commission’s guidance on unfair commercial practices is also an important interpretative aid.

Impacts of transposition of the new European directive

In connection with the transposition of the new EU directive, the Consumer Protection Act and the Civil Code are being amended in 2026. These changes introduce into Czech law explicit and strict prohibitions of specific practices that have not previously been regulated in such detail.

The use of general terms such as “eco-friendly” or “environmentally friendly” will be prohibited unless these characteristics correspond to demonstrably outstanding environmental performance of the entire product. Likewise, it will not be possible to present an ordinary legal obligation as a specific environmental benefit and competitive advantage.

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It will be prohibited to make an environmental claim about the entire product if, in reality, it relates only to one part of it. Any claim about future sustainability targets must be supported by a detailed, publicly available implementation plan and must be regularly audited by an independent third party.

It is also prohibited to omit information that a software update or a missing spare part may limit the functionality of the product. Consumers must be clearly informed about the statutory warranty and any voluntary durability guarantee by means of a single harmonised label.

FAQ

1. Do Czech companies face sanctions for greenwashing in the Czech Republic even before September 2026?
Yes, the Czech Trade Inspection Authority and Czech courts can already sanction and prohibit misleading environmental claims today on the basis of the general regulation of misleading commercial practices and unfair competition.

2. Do these new rules also apply to marketing communications in the B2B segment?
Although the directive primarily protects consumers, strict unfair competition rules under the Civil Code apply in B2B relationships. If you mislead your business partner with misleading environmental claims, you may face claims for damages or termination of contracts.

Practical rules for safe environmental marketing

If you want to continue communicating your environmental achievements successfully and safely even after the rules are tightened, each of your environmental claims must meet strict parameters. Above all, specificity and accuracy are key. Avoid vague slogans and, instead of “eco-friendly product”, state, for example, the specific proportion of recycled material.

For each claim, you must have reliable, up-to-date and scientifically recognised evidence available in advance, such as laboratory tests, certificates or a life-cycle assessment. You must keep these materials archived internally so that you can present them immediately to the supervisory authority in the event of an inspection.

Make sure that the benefit you declare does not cause more serious environmental harm at another stage of the product’s life cycle. Information must be presented in language understandable to the average consumer, and supplementary data should be easily accessible, for example via a QR code.

Examples of risky and prohibited claims

• "100% eco-friendly" or "Sustainable product": These claims are essentially indefensible, because every human activity has a certain environmental footprint.
• "Carbon-neutral product": If neutrality is declared on the basis of purchasing emission allowances or offsets, such a claim is completely prohibited for products.
• "Recyclable packaging": If the packaging is recyclable only in theory, but there is no infrastructure in the Czech Republic for its recycling, it is a misleading claim.
• "Compostable cup": If the product is compostable only in an industrial composting facility, a general claim of compostability must not appear on it.
• "Free of plastic X": If this substance is already legally banned in the EU for all manufacturers, presenting its absence as a benefit is unlawful.

How to work with offsets and future targets

New European legislation fundamentally changes the approach to so-called climate compensation. If your company invests in offset projects, you must not use these investments to label your products as carbon neutral. It is therefore necessary to change your communication strategy.

You will move to a so-called contribution-claims model, where instead of claiming neutrality you communicate a factually correct statement about supporting a specific environmental project.

If you communicate future targets, you must have an implementation plan prepared that includes specific, time-bound and measurable milestones, allocated financial resources, and a system of regular independent audits. This plan must be publicly available and the company must regularly report progress.

Overview of risks and legal assistance

Potential issues	How ARROWS helps (office@arws.cz)
Unclear or exaggerated environmental claims in advertising and on packaging: risk of a fine from the Czech Trade Inspection Authority (ČOI) (up to CZK 5 million) and lawsuits from competitors for unfair competition.	We will carry out a comprehensive legal audit of your marketing communications. We will review existing and planned campaigns, packaging and websites and propose legally safe wording.
Claims of product carbon neutrality based on offsets: risk of an immediate ban on product distribution and a serious reputational crisis.	We will help you set up decarbonisation communications safely. We will reset your communications from a neutrality model to a contribution-claims model in line with the new rules.
Use of your own "eco labels" and tags: risk of penalties for a misleading practice due to the absence of independent certification.	We will arrange independent verification of your labels and tags. We will assess whether your designations comply with the requirements for certification schemes and recommend a safe approach.
Insufficient documentation for environmental claims: inability to substantiate the claim during an inspection by the Czech Trade Inspection Authority (ČOI) or in court proceedings.	We will set up evidence-readiness processes within your company. We will prepare internal guidelines and a methodology for collecting evidence for your marketing and ESG teams.
International campaigns with differing national specifics: risk of breaching stricter rules in other EU Member States.	We will coordinate legal assessment as part of international compliance. Through our ARROWS International network, we will address environmental claims across European jurisdictions.

Risk management, internal control and evidence readiness

Preventing greenwashing has shifted from marketing departments directly to the level of company boards of directors and supervisory boards. Within ESG (Environmental, Social, Governance), this topic falls under the Governance pillar (corporate management and administration) and is closely linked to fulfilling the duty to act with due managerial care under Czech law.

Insufficient control over what a company publicly claims about its sustainability may result in weakened trust from investors and financing banks. Insufficient control over what a company publicly claims about its sustainability may result in weakened trust from investors and financing banks.

At the same time, members of statutory bodies face the risk of personal liability for damage caused to the company as a result of a high fine or damage to brand value. In Europe, the number of lawsuits filed by NGOs directly against company management is also rising sharply.

How to set up internal processes and controls

If a company wants to systematically prevent risks associated with greenwashing, it must implement a robust internal control system. The first step is a complete inventory of all environmental claims the company uses on packaging, in advertising, on social media or in press releases.

Next, it is essential to create an internal policy stating that no environmental claim may be published without prior substantiation with valid data and approval by the responsible person. Next, it is essential to create an internal policy stating that no environmental claim may be published without prior substantiation with valid data.

Regular training for marketing, sales and PR departments is also important. Employees must understand the difference between permissible marketing puffery and an illegal misleading claim that could harm the company.

The role of the supply chain and data quality

Responsibility for the truthfulness of environmental claims always lies with the company that places the product on the market. You cannot simply avoid liability by merely pointing to the fact that false information was provided to you by a foreign supplier.

Therefore, amend supplier contracts so that they include explicit warranties as to the truthfulness and scientific substantiation of all environmental data provided. The contract should include a full indemnity clause in case the claim proves to be untrue.

Require the submission of independent certificates and carry out audits of key suppliers. All communicated environmental data must be fully consistent with the data reported under mandatory ESG reporting, in order to avoid discrepancies that attract regulators' attention.

microFAQ

1. Does a company have to prepare an expensive life cycle assessment (LCA) for every environmental claim?
The level of evidence required must be proportionate to the nature and reach of the claim. For specific claims about a product’s overall environmental advantage, a detailed analysis or independent certification is necessary; for simple and narrowly defined claims, reliable technical documentation from the manufacturer is sufficient.

2. Who should have the final say within the company when approving marketing campaigns?
We recommend setting up the process so that the marketing team prepares the substantive concept, but final approval is subject to review by compliance or the legal department. This will reliably assess compliance with current case law and legislation.

How ARROWS, a Prague-based law firm, can help

The legal aspects of environmental marketing and preventing greenwashing require in-depth knowledge of Czech and European law, case law, and specific technical standards. The attorneys at our Prague-based law firm have long specialised in this area and provide comprehensive support.

We will carry out a comprehensive legal audit for you, as part of which we will review your existing packaging, product sheets, e-shops, advertising campaigns, and ESG reports. We will identify high-risk passages and propose specific wording changes to ensure full compliance with the new legislation.

We will help you prepare internal policies, set up marketing approval processes, and build a reliable system for archiving supporting evidence. We will also draft specific clauses for contracts with suppliers, advertising agencies, and distributors to protect your company.

We will represent you in proceedings before the Czech Trade Inspection Authority, regional trade licensing offices, the Advertising Council, as well as in court disputes concerning unfair competition.

Because we are insured for professional liability with a limit of CZK 400,000,000, our clients have the assurance of the highest level of safety and legal protection when implementing their business strategies. If you are interested in a consultation, you can contact us at any time at office@arws.cz.

Final summary

Over the course of 2026, greenwashing is definitively changing from an ethical lapse into a serious legal offence with severe financial and reputational consequences. The new legislation places a clear requirement on Czech companies: every environmental claim must be truthful, specific, scientifically substantiated, and independently verifiable.

Ignoring these rules exposes a company to the risk of ruinous fines, forced product withdrawals from the market, and irreversible damage to brand value.

If you want to continue using your genuine environmental achievements safely and effectively as a competitive advantage, entrust the setup of marketing compliance to experts. Our Prague-based law firm will help you navigate this legislative transformation without risks and penalties. Contact us at office@arws.cz.

Frequently asked questions about environmental marketing

1. Do we have to immediately remove all words such as “eco”, “bio” or “green” from packaging?
No, you do not have to remove them immediately, but you must have conclusive, scientifically substantiated evidence meeting strict criteria. If you cannot substantiate these general claims, you must replace them with specific, narrowly defined information no later than autumn 2026. Our specialists will be happy to help you with the review and safe wording.

2. Is it still possible to present our products as “carbon neutral” if we purchase certified offsets?
For products themselves, such communication is prohibited across the EU from September 2026. If you compensate emissions by purchasing credits, you must not label the product as neutral or climate-positive. The correct approach is to transition to a model of factually accurate contribution claims.

3. Do the new strict anti-greenwashing rules also apply to B2B communication?
Although the primary European consumer directive targets relationships with end customers, in a B2B context unsubstantiated environmental claims may be sanctioned as unfair competition under the Czech Civil Code. In addition, specific strict regulations apply in financial markets and in relations with investors.

4. Do we need an expensive LCA study prepared for every minor environmental claim?
The burden of proof must always be proportionate to the seriousness of the claim. For general claims about a product’s overall sustainability, a comprehensive analysis or independent certification is necessary; for specific and narrowly defined claims, credible technical documentation and data from vetted suppliers will suffice.

5. How should we communicate our long-term environmental and climate goals for the future?
You can actively communicate future environmental commitments, but only provided that you have a specific, realistic, and publicly available implementation plan that includes measurable milestones, clearly allocated resources, and is subject to regular independent audit. Vague promises without these elements will be considered misleading.

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic based on the legal framework as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association, and for maximum client safety we are insured for professional liability with a limit of CZK 400,000,000. To verify how this applies to your situation, contact us at office@arws.cz.

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