♻️Greenwashing, Climate Litigation and Environmental ADR: The New Italian Legislative Decree Implementing Directive (EU) 2024/825

by Pierfrancesco C. Fasano

Introduction

The Italian Council of Ministers has approved the legislative decree implementing Directive (EU) 2024/825, amending, inter alia, the framework governing unfair commercial practices. The reform represents a significant step in the European Union’s broader strategy to empower consumers for the green transition and to ensure that environmental claims are not merely aspirational narratives, but verifiable and accountable representations.

The initiative of the European legislator seeks to address a structural information deficit affecting the market: the effective sustainability of products and services is often opaque, inconsistently measured, and communicated through claims which may be ambiguous, exaggerated, or insufficiently substantiated. In such a context, consumer choice – theoretically a driver of sustainable transformation – risks being distorted.

While the existing Italian framework, primarily embodied in the Consumer Code and enforced by the Italian Antitrust Watchdog (Autorità Garante della Concorrenza e del Mercato - AGCM), already provides a solid legal basis to combat greenwashing, the new legislative decree strengthens and clarifies that framework. Importantly, it is likely to foster a more robust culture of enforcement not only by public authorities but also by private actors, with an increasing role for civil courts, collective actions, arbitration tribunals and environmental mediation mechanisms.

This contribution examines:

1. The principal innovations introduced by the legislative decree;

2. Their systemic impact on climate change litigation;

3. The growing relevance of environmental mediation and arbitration;

4. The intersection with collective redress mechanisms; and

5. The strategic implications for corporate governance and dispute resolution.

1. Reinforcing the Prohibition of Misleading Environmental and Social Claims

The legislative decree clarifies that practices are misleading where they induce the average consumer into error regarding the environmental or social characteristics of a product.

Although this clarification largely confirms the approach already adopted by the AGCM in numerous sanctioning decisions, its codification in primary legislation is not merely declaratory. It strengthens the normative clarity of the prohibition and provides civil judges with a more explicit statutory anchor for injunctive and compensatory relief.

From a litigation perspective, the key shift lies in the enhanced evidentiary expectations placed upon traders. Environmental claims must be:

• Specific;

• Substantiated by reliable evidence;

• Not liable to create an overall misleading impression;

• Consistent with measurable and verifiable criteria.

In effect, sustainability marketing now becomes a regulated space in which legal compliance intersects with scientific validation.

2. Future Environmental Performance and Decarbonisation Plans: A Gateway to Climate Litigation

Perhaps the most significant innovation concerns communications relating to future environmental performance.

The decree provides that claims concerning future environmental objectives are misleading where they are not supported by a detailed and realistic implementation plan, including:

• Measurable objectives;

• Clear timelines;

• Concrete implementation steps;

• Independent monitoring mechanisms.

This provision is likely to become a strategic tool in climate change litigation.

In recent years, climate-related claims across Europe have targeted corporate net-zero pledges, decarbonisation pathways, and transition strategies considered insufficiently concrete. The new rule creates a direct normative bridge between consumer protection law and climate accountability.

Where a company publicly commits to carbon neutrality by a certain date but fails to articulate a credible pathway, affected parties – including consumer associations, competitors or NGOs – may seek:

• Injunctive relief to prohibit misleading communications;

• Corrective advertising measures;

• Damages for reliance-based loss;

• Collective redress under representative action frameworks.

The risk exposure extends beyond reputational harm: sustainability strategies are now justiciable in consumer law terms.

3. Comparative Environmental Claims and Misleading Omissions

The decree introduces an additional form of misleading omission, targeting comparative environmental claims that omit relevant information necessary to keep the comparison accurate and up to date.

This provision is particularly relevant in digital marketplaces, where online comparators and rating platforms may present simplified environmental metrics without disclosing methodological limitations.

From a private enforcement perspective, this creates opportunities for:

• Competitors to challenge misleading comparisons;

• Businesses to seek corrective remedies against third-party comparators;

• Consumer organisations to intervene where systematic distortions occur.

In practice, disputes of this nature may be well suited to expedited arbitration or expert determination, particularly where technical environmental metrics are contested.

4. Expansion of the “Black List” of Automatically Misleading Practices

The decree integrates the so-called “black list” of practices deemed in all circumstances misleading.

4.1 Sustainability Labels and Certification Systems

The display of a sustainability label is prohibited unless it is:

• Based on a recognised certification scheme; or

• Established by public authorities.

Furthermore, the certification system must ensure independent monitoring of compliance by a third party independent both from the scheme owner and from the operator displaying the label.

According to Recital 7 of Directive (EU) 2024/825, such third party should be accredited under ISO 17065 or by a national accreditation body. This corresponds to a particularly rigorous level of assurance.

The practical implication is profound: companies relying on private sustainability schemes must now verify whether their certification structure meets the enhanced independence and accreditation requirements.

Failure to do so exposes the undertaking to administrative sanctions, civil litigation and potentially collective actions.

4.2 Generic Environmental Claims

Generic environmental claims – such as “environmentally friendly”, “green”, or “sustainable” – are prohibited unless:

• The undertaking has obtained an official Ecolabel; or

• It can demonstrate compliance with recognised EU environmental performance standards.

This codifies and clarifies the evidentiary threshold that businesses must meet. Vague environmental marketing without quantifiable backing will no longer survive regulatory scrutiny.

4.3 Claims Concerning the Product as a Whole

Environmental claims referring to the product as a whole are prohibited where they concern only a specific aspect (e.g., packaging rather than the product itself).

This addresses the common practice of partial sustainability framing, where a limited improvement is presented as a comprehensive environmental virtue.

4.4 Carbon Neutrality and Offset-Based Claims

The decree prohibits claims suggesting that a product has a neutral or positive environmental impact where such claims are based solely on greenhouse gas offsetting schemes.

This provision is particularly consequential.

Offset-based neutrality claims have been at the centre of multiple disputes across Europe. The new rule reflects a regulatory scepticism towards narratives implying that consumption has no environmental impact.

In litigation terms, this opens avenues for:

• Injunctions against “carbon neutral” labelling;

• Claims of deceptive advertising;

• Collective consumer actions;

• Challenges by competitors under unfair competition law.

5. Greenwashing as a Litigation Vector in Climate Change Disputes

Greenwashing is no longer confined to marketing law. It has become a structural vector in climate litigation.

Three litigation pathways may converge:

1. Consumer protection litigation under unfair commercial practices law;

2. Tort-based climate litigation, alleging harm arising from misleading decarbonisation commitments;

3. Shareholder or investor actions, where sustainability disclosures prove misleading.

The new legislative framework enhances the normative basis for arguing that vague transition strategies are not merely aspirational but legally problematic.

We may expect courts to increasingly scrutinise:

• Net-zero roadmaps;

• ESG disclosures;

• Sustainability-linked financial instruments;

• Public decarbonisation pledges.

Greenwashing thus becomes a gateway claim: once misleading communications are established, broader arguments concerning systemic climate responsibility may follow.

6. Class Actions and Representative Proceedings

The strengthened framework also intersects with collective redress mechanisms.

Under EU representative action regimes, consumer associations may seek:

• Injunctions;

• Redress measures;

• Corrective information.

Where green claims are widely disseminated, collective harm is easier to establish. The decree’s clarity reduces interpretative uncertainty and lowers procedural barriers for collective litigation.

From a corporate risk perspective, greenwashing is no longer a marginal regulatory concern but a potential mass-claim trigger.

7. Environmental Mediation: A Preventive and Corrective Tool

While litigation risk increases, alternative dispute resolution offers a complementary pathway.

Environmental mediation can address disputes arising from:

• Allegedly misleading sustainability communications;

• Conflicts between companies and NGOs;

• Community opposition to transition projects;

• Disputes between competitors over comparative environmental claims.

Mediation allows:

• Scientific experts to contribute to factual clarification;

• Corrective communication strategies to be negotiated;

• Structured commitments to be incorporated into settlement agreements;

• Reputational repair without adversarial escalation.

In climate-sensitive contexts, mediation may provide a forum capable of reconciling legal, technical and reputational dimensions.

8. Arbitration and Expert Determination in Sustainability Disputes

Arbitration may be particularly suitable where:

• Disputes arise between commercial parties regarding sustainability clauses;

• ESG representations are embedded in supply contracts;

• Certification compliance is contested.

Arbitral tribunals, supported by technical experts, are well placed to examine complex environmental metrics.

Expert determination may also be used where contractual sustainability targets require technical assessment. This mechanism allows for rapid, specialist-driven resolution without full adversarial proceedings.

9. Compliance Deadlines and Strategic Governance Implications

Businesses have until 27 September 2026 to align their communications and certification structures with the new requirements.

This transitional period should not be perceived as a deferral of risk but as an opportunity for structured compliance review.

Corporate boards should consider:

• Auditing all sustainability claims;

• Reviewing certification schemes;

• Assessing exposure to collective redress;

• Integrating legal review into ESG strategy;

• Establishing internal governance protocols for environmental communications.

At the same time, greater regulatory certainty may mitigate the equally damaging phenomenon of “greenhushing” – the reluctance to communicate legitimate sustainability efforts for fear of litigation.

Conclusions

The Italian legislative decree implementing Directive (EU) 2024/825 marks a decisive evolution in the regulation of environmental claims.

Greenwashing is no longer a peripheral marketing issue but a central legal risk intersecting consumer law, climate litigation, collective redress, arbitration and environmental mediation.

By clarifying standards, tightening certification requirements and regulating future-oriented claims, the new framework enhances legal certainty while simultaneously expanding avenues for both public and private enforcement.

For businesses, the message is unequivocal: sustainability communication must be legally robust, scientifically substantiated and transparently governed.

For dispute resolution professionals, the reform signals a growing field of climate-related conflicts in which mediation, arbitration and expert determination may provide structured, credible and efficient pathways.

Ultimately, strengthening the integrity of environmental claims is not merely a regulatory exercise. It is a prerequisite for restoring trust in the green transition, ensuring fair competition and fostering responsible corporate conduct in a climate-constrained world.