'Climate Neutral' Under the EmpCo Framework: What Companies Need to Know

In its well-known 2024 'climate neutral' ruling, Germany's Federal Court of Justice held that environmental advertising must meet strict standards of accuracy, clarity, and unambiguity. The court specifically emphasised that consumers need to understand what sits behind an ambiguous term like 'climate neutral,' noting that reduction and offsetting are not equivalent. That ruling was already a clear warning signal. The EmpCo framework now goes further still for certain product-level claims.

Under the current UWG, it is expressly listed as an always-impermissible commercial practice to make a claim based on the offsetting of greenhouse gas emissions asserting that a product has a neutral, reduced, or positive effect on the environment in terms of its emissions. The EU directive cites examples including terms such as 'climate neutral,' 'CO2 neutral,' 'carbon positive,' or 'climate compensated,' where that effect is achieved through offsetting outside the company's own value chain.

No — that would be the wrong conclusion. The directive explicitly clarifies that companies may continue to inform the public about investments in environmental and climate protection projects. What they should avoid is turning that information into a misleading promise about the product's own environmental impact. That distinction matters. Instead of 'Your stay is climate neutral,' communication could, for illustration only and provided it is accurate and substantiated, describe something like: 'For 2025, we calculated our operational greenhouse gas emissions using [a named methodology]. We also support [a named climate protection project].' That framing does not claim the stay itself has no climate impact — it simply describes what the company is actually doing.

The trend of recent years is fairly clear. The interesting question is no longer 'how do we offset our emissions?' but rather 'what emissions arise, and how are we actually reducing them?' For communication, that implies a shift: from labels to data, from neutrality to change, from an abstract '0' to a concrete, verifiable reduction figure.

First, state a baseline, for example: 'In 2023, our operational emissions were [a specified, hypothetical figure] tonnes of CO2e.' Second, state the change: 'By 2025, they were [a specified, hypothetical percentage] lower than in 2023.' Third, explain the scope: 'The calculation covers Scope 1 and 2 emissions, following [a named methodology].' These figures are illustrative only. This approach sounds less punchy than simply saying 'climate neutral' — but it is precisely for that reason more defensible.

Our conclusion: the term 'climate neutral' was convenient because it compressed a complex reality into a single word. The new regulatory framework forces companies to make that complex reality visible again. That is more work — but it is likely also better sustainability communication.

EmpCo primarily complements the rules for commercial practices directed at consumers. Check the applicable national implementation separately; Germany’s UWG does not automatically govern claims in other countries. Precise wording alone does not replace matching evidence or a responsible person’s decision before publication. Review the overall impression, including the heading, image and immediately visible explanation. Automated findings do not approve a claim.

The product-level prohibition on climate impact claims based on greenhouse gas offsetting cannot be cured by an explanatory disclaimer. Communicate verified reductions in your own emissions and support for external climate projects separately. Funding a project does not reduce the emissions accounted for in the product footprint.