How the ECGT Directive Will Impact UK Businesses—and How to Prepare
Introduction
The European Union’s Empowering Consumers for the Green Transition Directive (ECGT, Directive 825/2024/EU) is set to fundamentally reshape how businesses communicate their environmental and social credentials. While the UK is no longer part of the EU, the Directive’s reach extends to any UK business that sells to, markets to, or operates within the EU—especially those using sustainability labels such as B Corp certification. For these organisations, understanding and adapting to the ECGT is essential to remain competitive and compliant.
What Is the ECGT Directive?
The ECGT Directive is a cornerstone of the EU’s Green Deal and Circular Economy Action Plan. Its main aim is to protect consumers from misleading “green” claims—often referred to as greenwashing—by ensuring that sustainability labels are credible, transparent, and independently verified. The Directive amends existing EU consumer protection laws and will be enforced from September 2026, raising the bar for environmental and social claims across the continent.
Key Provisions Affecting UK Businesses
One of the most significant changes is the introduction of stricter rules on sustainability labels. The ECGT defines a sustainability label as any voluntary mark, public or private, that highlights a product or business’s environmental or social characteristics. Only labels established by public authorities or certified through robust, independent third-party schemes will be permitted. Self-created or non-credible labels will be prohibited. For example, the B Corp certification falls within the ECGT’s definition of a sustainability label. To remain valid in the EU, it must meet the Directive’s requirements for transparency, third-party verification, and ongoing compliance1.
The Directive also bans generic environmental claims such as “eco-friendly”, “green”, or “climate neutral” unless they are supported by recognised, verifiable evidence. Businesses must substantiate any environmental claims with measurable data and avoid presenting basic legal compliance as a unique selling point. In addition, there are new consumer information requirements: businesses must provide clear, prominent information about product durability, reparability, and guarantees. For goods with digital elements, information on software updates and environmentally friendly delivery options must also be disclosed1.
Enforcement will be robust, with significant penalties for non-compliance, including fines and advertising bans. The responsibility lies squarely with businesses to ensure their sustainability claims and labels meet the new standards. Even though the UK has its own consumer protection laws—such as the Green Claims Code and the Digital Markets, Competition and Consumers Act 2024—the ECGT will apply to any UK business that sells or markets products to EU consumers, operates within EU-based supply chains, or uses sustainability labels in the EU market. If your business is B2C and operates in the EU, you must ensure your sustainability communications and certifications are ECGT-compliant by September 20261.
Real-World Examples: UK Businesses Affected by the ECGT
The most prominent group affected are UK-based B Corps with business-to-consumer operations in the EU. B Lab UK—the certifying body for B Corps in the United Kingdom—has been actively communicating with its community about the need to transition to new standards that will meet the ECGT’s requirements. Under the new rules, only sustainability labels established by public authorities or certified through robust, independent third-party schemes will be permitted in the EU. The current B Corp certification model will not comply with the ECGT, so B Lab is creating new certification pathways to enable affected companies to be certified on the new standards by the deadline.
A practical illustration is provided by Bates Wells, a founding member of the UK B Corp community and a well-known law firm. As highlighted by their leadership, the new standards are shaping their strategy, culture, and approach, and they are navigating the changes brought by the ECGT to ensure continued compliance and leadership in responsible business practice. Other UK B Corps—such as those in the food, retail, and consumer goods sectors—are also being urged to self-assess against the new standards, engage with B Lab UK, and participate in webinars and community events to stay ahead of regulatory developments.
Legal analysis from Bates Wells further confirms that any UK company marketing products to EU consumers may be subject to claims and regulatory action in those EU countries if they breach the national laws implementing the ECGT. This applies regardless of any clauses in their terms and conditions that attempt to specify UK law or jurisdiction.
In summary, UK B Corps with EU-facing operations—such as Bates Wells and hundreds of other certified businesses—are at the forefront of adapting to the ECGT. They are updating their certification, communications, and compliance processes to meet the new standards, ensuring that their sustainability claims remain credible, transparent, and legally robust in the evolving European regulatory landscape.
How to Prepare: Practical Steps
The first step for UK businesses is to review and update all sustainability claims, auditing every environmental and social claim made in marketing, packaging, and communications. Any generic or unverified claims should be removed or substantiated. Next, businesses should assess their sustainability labels. If you use third-party certifications such as B Corp, confirm that the scheme is updating its standards to align with the ECGT. Engage with certifiers like B Lab UK to understand their transition plans and timelines—B Lab is already working to ensure the new B Corp standards will be ECGT-compliant by September 2026. It’s also essential to strengthen the data and evidence behind your claims, ensuring everything is backed by robust, measurable data and that you are prepared to disclose evidence and methodologies if challenged.
Training is another crucial element. Marketing, compliance, and product teams must be educated on the new requirements, and businesses should stay informed about further guidance from industry bodies and regulators. Early engagement is key: start self-assessing against the new standards now, and participate in webinars, drop-in sessions, and community events to stay ahead of developments.
Turning Compliance into Competitive Advantage
Rather than viewing ECGT compliance as a burden, UK businesses can use it as an opportunity to build trust, reduce legal risk, and differentiate themselves in a crowded market. Transparent, credible sustainability practices are increasingly valued by consumers, investors, and partners. The ECGT Directive marks a new era for sustainability communications in Europe. For UK businesses, especially those with EU ambitions or B Corp certification, the time to act is now. By aligning with the new standards, you’ll not only ensure compliance but also position your business as a leader in responsible, transparent practice.