The End of Greenwashing? What the new directive means for ESG communications

"Sustainable", "green", and "environmentally friendly" have become common business buzzwords in recent years. Since September 27, 2026, however, such claims face much greater scrutiny under national rules implementing the EU's new Empowering Consumers for the Green Transition Directive (EU) 2024/825 (EmpCo) /link https://eur-lex.europa.eu/eli/dir/2024/825/oj/eng/. The new directive aims to combat greenwashing by ensuring that environmental claims are transparent, specific, and supported by evidence rather than marketing language.

EmpCo does not introduce new metrics. Instead, it focuses on how environmental claims are presented to consumers, particularly in marketing materials such as factsheets and other investment marketing information that reaches retail investors. Its goal is to ensure clear and accountable communication.

One of EmpCo's key messages is that broad environmental claims such as "green" or "sustainable" are no longer sufficient on their own. Companies must be able to explain why something is sustainable and, where necessary, verify such statements.

What Does This Mean for Financial Services?

Investors expect sustainability information that is measurable, comparable, and backed by reliable data.

As anti-greenwashing requirements continue to evolve, companies should rely on objective disclosures rather than broad environmental claims and marketing statements. This makes transparent ESG reporting more important than ever.

Supporting Transparent ESG Disclosures

Providing sustainability information is no longer just about presenting ESG data. It is equally important to show where the information comes from and how it has been derived.

This is exactly what the cleversoft ESG Information Document was developed for.. It provides structured sustainability information, including:

• SFDR classifications

• Exclusion criteria

• PAI-related information

• ESG ratings

• SDG-related metrics

• Carbon and greenhouse-gas indicators

• Methodology references

• Data-source transparency

• Coverage information and explanatory notes

Instead of relying on generic sustainability statements, the ESG Information Document provides measurable indicators and documented data sources.

This allows investors to better understand and compare sustainability characteristics, while enabling companies to communicate ESG information in a transparent, clear, and properly supported way.

However, the ESG Information Document is not the only material affected by EmpCo. It may also apply to the information you present on your fund factsheets and fund detail pages, as well as to textual elements such as the investment objectives or naming of managed portfolios.

For example, a sustainability term such as "Climate Focus" [Klima-Fokus] should generally not be used without clarification. It should be accompanied by a specification that is clear and concrete, displayed prominently on the same medium. An illustrative wording could be:"Was 'Klima-Fokus' bei diesem Depotmodell bedeutet: Zum [30.09.2026] sind [XX] % des Depotmodells in ETFs investiert, die [einen EU-Klimaübergangs- oder Paris-abgestimmten Referenzwert (CTB/PAB) abbilden]. Die übrigen [YY] % des Portfolios unterliegen keiner klimabezogenen Auswahl." [What "Climate Focus" means for this model portfolio: As of [30.09.2026], [XX]% of the model portfolio is invested in ETFs that [track an EU Climate Transition or Paris-Aligned Benchmark (CTB/PAB)]. The remaining [YY]% of the portfolio is not subject to any climate-related selection.]

Visual elements count too: leaf motifs, globe icons, and even green color schemes that suggest a product is sustainable can qualify as environmental claims under EmpCo's broad definition and, if so, must meet the same clarification requirements.

Supporting Your EmpCo Readiness:

You Define the Changes, We Support the Implementation

To support evolving regulatory expectations such as EmpCo, we continuously enhance our ESG and FactsheetsLive™ services. While you assess your factsheets, fund detail pages and portfolio information and define the changes required, cleversoft can support you with the relevant ESG data, structured information and document implementation.

Share your requirements with us. Your Account Manager and Customer Success Team will coordinate the next steps with our ESG and FactsheetsLive™ services.

Please note: This article is for general information purposes only and does not constitute legal advice.