What are the new EU Green rules to prevent Greenwashing?

What are the new EU Green rules to prevent Greenwashing? - Portugal Business News

Green News Europe - Here are the new EU Green rules to prevent Greenwashing, according to an announcement dated June 24, 2026:

The new EU Green rules approved by the Council update the existing Sustainable Finance Disclosure Regulation (SFDR) and will now have to be voted by the European Parliament.

What are the new EU Green rules to prevent Greenwashing?

The revision of the EU Green rules to prevent Greenwashing will replace existing concepts which have led to ‘greenwashing’. Greenwashing includes cases in which companies give a false impression of their environmental impacts or benefits.

The new EU Green rules to prevent Greenwashing revise the following categories:

Sustainability:

The new EU Green rules include products that contribute to sustainability goals, such as investments in companies or projects already meeting high standards.

Green transition:

The new EU Green rules include products channelling investments towards companies or projects that, while not yet sustainable, are on a credible path.

Environmental, Social, and Governance (ESG) rules:

The new EU Green rules include other products that may integrate ESG approaches but do not meet the criteria of sustainable or transition categories

What are the specific revisions to the new EU Green rules?

The review updates the already existing Sustainable Finance Disclosure Regulation (SFDR) which requires market participants to disclose how they integrate Environmental, Social, and Governance (ESG) sustainability risks and adverse impacts into their investment offers.

EU Revisions in the Sustainability category:

The new EU Green rules strengthen the sustainable category by stipulating when companies identify and disclose the principal adverse impacts of their investments on sustainability factors. They must make mandatory use of at least three indicators from a list to be provided by the European Commission to support their claims. This should allow for better comparability between financial products.

EU Revisions in the Green Transition category:

To recognise their important role in the Green transition, the EU clarifies that investments in companies active in the fossil fuel sector which allocate 20% of their capital expenditure to economic activities aligned with EU taxonomy (green classification) rules, and with a clear, time-bound strategy to reduce greenhouse gas emissions, may be considered for inclusion in the Transition category. To enhance transparency, such investments must also be subject to a fourth mandatory indicator when assessing adverse impacts.

Green issuances by public sector bodies:

Green issuances by public sector bodies represent a significant share of investments by financial market participants, in particular financial products in the insurance and pension sectors. Recognizing the established framework of climate and sustainability commitments at EU level, which makes it possible to meaningfully assess their compatibility with sustainability objectives, the EU will explicitly allow the inclusion of such issuances by Union-established bodies in the transition category under certain conditions.

Exclusions for alternative investment funds offered exclusively to professional investors:

The new EU Green rules allow financial market participants not to apply the categorisation provisions for alternative investment funds offered exclusively to professional investors, given that such investors do not need the same level of standardized information that should be made available to retail investors.