How to make green claims in the real estate industry legally compliant

Sustainability is one of the defining issues in political and economic decision-making processes. Sustainability is also a high priority in the real estate industry. Real estate companies, project developers, and investors are increasingly taking these aspects into account and positioning themselves on the market through appropriate environmental communication, in short: through green claims.

The European Union's EmpCo Directive (“Directive on Empowering Consumers for the Green Transition”) introduces a new standard for the use and admissibility of environmental claims: consumers should be reliably protected against greenwashing. Companies must therefore meet strict documentation requirements before they can present themselves on the market with terms such as “environmentally friendly”, “climate neutral”, or “green.”

As a result, companies are required to fundamentally rethink their marketing practices and deal with processes for verification, certification, and legal review. Otherwise, they face consequences under unfair competition law.

This article highlights the legal issues currently arising in this regard, particularly for real estate companies in Germany and Europe, how these issues can be resolved, and how risks in environmental advertising can be effectively minimized.
The EmpCo Directive was already adopted by the European Parliament on January 17, 2024, and officially entered into force on March 26, 2024. However, the topic is now becoming relevant. This is because all EU member states must transpose the directive into national law within 24 months, i.e. by the end of March 2026 at the latest; for Germany, a reform of the Unfair Competition Act (UWG) is planned. The government draft for this has been available since the beginning of September 2025.

EmpCo aims to permanently prevent misleading environmental claims and greenwashing in consumer marketing communications. The directive stipulates that companies may only use environmental claims in advertising if they are accurate and specific.

A key element of this is the ban on unsubstantiated general environmental claims. Terms such as “environmentally friendly”, “sustainable”, “green”, or “bio-based” may only be used in advertising if they can be proven to have “recognized excellent environmental performance.” This approach is already covered in Germany by the requirements for ambiguous environmental claims (see our article on the Federal Court of Justice ruling on “climate neutral”.

Advertising with climate neutrality will be prohibited in the future if this is achieved exclusively or even partially through offsetting measures – a response to criticism that compensation payments for greenhouse gas emissions often have no real environmental benefit. Another new key regulation is that sustainability or environmental labels must be based on a certification system that meets certain requirements or has been introduced by government agencies; “green labelling” without an appropriate basis will be prohibited.

Statements about the future environmental performance of a company or product are also no longer possible without further ado. Whether a climate or environmental target can be communicated for 2030, for example, depends on whether there is a detailed and realistic implementation plan that includes measurable and time-bound targets, among other things, and which must be continuously reviewed by external experts.

EmpCo records both written and verbal statements and sets strict requirements for the clarity of information and the provision of evidence. Companies must ensure that all forms of communication - whether in brochures, on websites, in sales talks, or at events - strictly comply with the guideline and the certification standards based on it. Existing claims are not protected by transition periods and must be reviewed and, if necessary, certified in order to continue to be used in the future. If this is not successful, companies may have to abandon even long-established campaigns, claims, or even brands.

The key challenges posed by the EmpCo Directive and the new UWG for the real estate industry are therefore to formulate environmental statements precisely and accurately, to integrate the new requirements into existing processes and contracts, to provide evidence, and, where applicable, to obtain certifications. Anyone who wants to advertise as a builder, project developer, or operator using terms such as “environmentally friendly”, “climate neutral”, “sustainable”, or “green” must also ensure that the projects actually have recognized excellent environmental performance. The relevant documentation concerns, for example, energy consumption, greenhouse gas emissions, the use of sustainable materials, and much more.

These legal challenges raise very practical questions: How must environmental claims be legally reviewed and validated? Which internal documentation and compliance routines need to be adapted or newly introduced so that all claims can be fully verified? Existing contracts - e.g., with suppliers or service providers - may require additional agreements that clearly regulate the obligation to provide evidence and liability. New sustainability labels may only be used if they are based on compliant and transparent certification that is regularly reviewed and updated. Promises regarding future environmental performance must be accompanied by a detailed implementation plan with realistic (interim) targets.

Companies in the real estate industry should develop a comprehensive strategy for legally compliant environmental communication: claim, communication, validation, verification. The approach and best practices are based on checking all green claims in advance, providing validated evidence, and introducing processes for continuous adaptation to new requirements. It is generally advisable to set up a digital verification system that centrally documents all current certificates, life cycle assessments (LCA reports), and audit data, and makes them immediately available in case of queries or disputes.

Cooperation with recognized certification partners increases legal certainty and the trust factor vis-à-vis investors, tenants, and partners. Regular compliance training for all departments - especially sales, marketing, and legal - should be mandatory. Transparency is recommended for communication: instead of blanket terms, the focus should be on specifically measured results and certified services, supplemented by a digital reference structure (e.g., QR codes in brochures and on websites).

Contractual provisions regarding documentation requirements, liability, and rights of withdrawal should be included in all project, supplier, and service agreements. Monitoring claims and continuously updating data are key to regularly implementing new legal requirements and industry standards.

The EmpCo Directive sets a new standard for legally compliant and credible environmental communication in the real estate industry. Only those who carefully document their claims, implement independent certifications, and transparent information processes will remain competitive in the long term and operate in a legally compliant manner. Companies must proactively adapt their processes, contract content, and communication strategies and establish a compliance system that checks and documents green claims in advance across all media and sales channels. Future developments will bring further tightening and professionalization - both in legal review and in the technical implementation and digitization of certificates and environmental credentials.