How sustainability initiatives impact trademarks

Therefore, trademark owners and practitioners need to consider how the changing regulatory environment affects their strategy, particularly as pressure from marketing departments to promote green credentials is likely only to increase.

European Green Deal

The European Green Deal aims to make Europe the first climate-neutral continent. Over the past few years, it has led to several legislative projects covering reporting, packaging, recycling and advertising.

One of these is the Directive on Empowering Consumers in the Green Transition. This updates the Unfair Commercial Practices Directive and the Consumer Rights Directive to protect consumers by giving them information on the expected lifetime of products and ensuring environmental claims are "fair, understandable and reliable."

EU Member States have until March 27, 2026, to transpose this regulation into their national laws. It will enter into application from September 27, 2026.

The Directive defines "environmental claim" as "any message or representation […] including text, pictorial, graphic or symbolic representation, such as labels, brand names, company names or product names, in the context of a commercial communication, and which states or implies that a product, product category, brand or trader has a positive or zero impact on the environment or is less damaging to the environment than other products, product categories, brands or traders, or has improved its impact over time."

The legislation aims to support consumers in making informed purchasing choices by covering environmental or social product characteristics and reparability or recyclability. Commercial practices will be regarded as misleading if they make unfounded or unsupported environmental claims or advertise benefits "that are irrelevant and do not result from any feature of the product or business."

Another important EU initiative is the proposal for a Directive on Green Claims, put forward by the Commission in March 2023. This would require companies to substantiate their voluntary green claims in business-to-consumer communication.

A study by the European Parliamentary Research Service found that there were approximately 230 active ecolabels in Europe and 100 private green energy labels in 2020. Meanwhile, a European Commission report found that around 53% of examined environmental claims in the EU were vague, misleading or unfounded and 40% were unsubstantiated.

If passed, the Green Claims proposal would set strict requirements for companies. For example, they would have to specify whether environmental claims cover all or just part of a product, ensure that claims are based on recognized scientific evidence, take a life-cycle perspective, consider all significant sustainability aspects and include primary and / or secondary information. Not complying with these obligations could lead to fines of up to 4% of annual turnover.

Impact on trademarks

The new, tighter EU rules are likely to have at least three main consequences for trademark practitioners.

First, it will be even more important when selecting, registering and using trademarks to confirm that they are not misleading to consumers. In particular, any use of terms such as "eco-friendly," "energy efficient," "green" and "biodegradable" in brands and slogans, as well as images or designs that reference those concepts (such as green-colored logos), will come under greater scrutiny. Unless the claims can be justified, the trademarks may be objected to on the grounds of deceptiveness or descriptiveness, and their owners may face monetary fines.

Moreover, the likely need to provide more information to customers prominently on packaging (possibly using standardized or simplified text) could have an impact on the expressiveness of trademarks – including marks for the colors and shapes of products and their packaging. Taking a slightly broader view, this could potentially alter established branding and product presentation.

Second, the role of certification marks could increase significantly as a means of authenticating product claims. Compliance with certain environmental requirements in different fields may be judged by the use of a certification mark that denotes sustainability, zero emissions, ethical source of materials, etc.

On the one hand, operators of certification schemes will need to be painstaking in how their marks are used and ensure assessments operate fairly and transparently. On the other hand, brand owners will need to consider the benefits of being part of various schemes and the consequences for their branding strategy. For both sides, it is crucial to have an early and clear understanding of the certification mark's terms of use, including its duration, the range of products covered, applicable jurisdictions, any supporting documentation and, of course, royalties or other payments.

Third, IP counsel must pay even more attention to marketing and advertising campaigns featuring environmental claims. While this may fall outside the traditional remit of trademark practitioners, their expertise could help in identifying any misleading or unsupported claims that could be problematic. This could include text or images that convey certain ideas without explicitly stating them.

It is not just in the EU that green statements are coming under the microscope. In the United Kingdom, the Advertising Standards Authority (ASA) regulates environmental claims in advertising and has provided guidance on this topic. In its 2023 annual report, Committees of Advertising Practice Chair James Best said: "Our most important work in the long term has perhaps been concerned with environmental claims."

In 2023, the ASA addressed misleading claims in energy and transport, including green statements from airlines and omitted facts from oil and gas companies. Collaborating with partner agencies, it also focused on assertions relating to greener homes, green finance, food labeling and carbon neutrality / net zero.

A tricky balancing act

In an article published last year, the European Innovation Council and SMEs Executive Agency warned that "a company's greenwashing practices applied to its branding strategy – e.g., registering trademarks projecting a clean, sustainable image – could end up falling under [the EU's proposed and draft] provisions and being strongly scrutinized by regulatory authorities, or even prohibited under consumer protection laws."

With the EU legislation in this area constantly expanding, trademark owners that do business in the EU need to be vigilant to ensure that their products and services remain compliant while also maintaining the distinctive appeal of their branding. In parallel, trademark practitioners need to be proactive yet cautious in providing their advice in regard to environmental claims. Reflecting on the growing weight of obligations on both groups, these could well prove to be increasingly difficult balancing acts.

A version of this article was first published in CITMA Review.