The proposal aims to prohibit companies from making unfounded sustainability claims unless they are scientifically substantiated. The plan forms part of the broader European Green Deal. The directive previously received broad support but is now under pressure due to political shifts in Brussels.
Last week, a Commission spokesperson suggested the proposal was being withdrawn after the Christian Democratic EPP group requested it. Those statements caused considerable confusion. Since then, the Commission has clarified that the proposal formally remains on the table. The European Greens referred to it as a "coordinated attack" on climate efforts.
Within the Council of EU ministers, support for the directive has declined. Italy, previously an important supporting country, withdrew, causing the qualified majority to lapse. This was done without clear explanation. According to several sources, Italy's decision was politically motivated.
The discussion surrounding the directive takes place amid a broader conflict within the European Parliament. The EPP wants to revise or scrap several Green Deal laws. The group accuses the Commission of going too far with environmental rules that would burden companies. Other groups accuse the EPP of undermining climate policy.
Earlier, the European Parliament failed to reach a compromise regarding an exemption for small companies with fewer than ten employees. In that case, the directive would not apply to more than 90 percent of small and medium-sized enterprises.
The Social Democratic S&D, liberal Renew, and The Greens have called on the Commission to uphold the proposal. They warned that withdrawing it would damage the trust of citizens and businesses. Renew pointed to the risk of consumers being misled without clear legislation.
An agreement on the content of the directive had already been reached in the European Parliament. Several members expressed dissatisfaction over the Commission’s decision to halt negotiations with the EU countries. According to them, this was done without consultation and without regard for earlier agreements.
According to Euractiv, the Commission reportedly had internal legal doubts about withdrawing the proposal. It would not be easy to do since the Parliament had already taken a position. Nevertheless, negotiations were suspended, leading to sharp reactions from several group leaders.
For now, the proposal formally remains on the table. However, its future is uncertain as long as no new qualified majority emerges among member states. Several observers expect the issue to be discussed again only after the summer. Until then, the directive remains in political deadlock.