Sinja Krauskopf

Sinja Krauskopf

Managing Director | Adconterra GmbH

EmpCo Directive: Why reliable supplier data is becoming a management responsibility

Sustainability promises must do more than sound good in the future: they must be robust, traceable and supported by up-to-date evidence. With the EmpCo Directive, requirements for environmental and product information provided to consumers are increasing significantly. This makes the quality of supplier and product data a strategic issue – for procurement, supply chain, marketing and executive management. Anyone advertising recycled content, climate-friendly materials or responsible sourcing must be able to control the specific evidence behind the claim. This insight explains why EmpCo goes far beyond communications and how companies can make their claims and supplier management fit for the future.

Environmental promises become a matter of corporate governance

The EmpCo Directive – short for “Empowering Consumers for the Green Transition” – tightens the rules for environmental and sustainability claims made to consumers. From 27 September 2026, the corresponding national implementing provisions will also apply in Germany. The focus is on traceable information about the environmental properties, durability, reparability and updates of products. In the event of an intentional or negligent widespread violation of the new consumer-protection requirements, Section 19 of the German Act Against Unfair Competition (UWG) allows for a fine of up to EUR 50,000. For companies with annual turnover of more than EUR 1.25 million, the fine may amount to up to 4 percent of the annual turnover generated in the affected EU Member States. This is not a blanket penalty for every violation, but a statutory maximum framework for certain widespread violations; the specific amount depends on the individual case and the competent authority.

EmpCo is therefore not merely a communications issue. The Directive affects corporate governance: responsibilities, data quality, supplier management and the question of which product promises are actually robust in the market. What matters is not only which statements may be used, but also whether relevant statements about products, materials and suppliers can be substantiated in a traceable manner.

**Key message:** EmpCo does not introduce a general obligation to “sustainable procurement”. It does, however, increase liability, reputational and management risk when environmental or circularity characteristics are communicated without robust evidence and up-to-date supplier data.

What EmpCo changes in concrete terms

The Directive supplements EU requirements on unfair commercial practices and consumer information. In February 2026, Germany transposed the provisions through amendments to the Act Against Unfair Competition (UWG) and to consumer and contract law. General environmental claims such as “green”, “ecological” or “environmentally friendly” are heavily restricted without clear and verifiable qualification. Claims about the product as a whole may not suggest an environmental benefit that actually relates only to one component or one individual process. Product-related climate claims based solely on the crediting or offsetting of greenhouse-gas emissions outside the value chain are impermissible in their previous form. Comparative claims must be based on objective, consistent and comparable foundations; sustainability labels are also subject to stricter requirements. Correct information on durability, reparability and software updates is becoming increasingly important. The Directive does not prescribe which products companies must purchase. It does, however, determine how robust and precise statements about products and their characteristics must be when they reach consumers in a purchasing decision.

The strategic significance of EmpCo

EmpCo concerns the interface between the product, market communications and consumer information. A company’s own product portfolio, sales channels and the economic significance of existing environmental and product claims must therefore be considered together. Not every statement needs to be retained: a narrower, precise performance promise is often more robust than an attention-grabbing message that is not sufficiently substantiated. Which statements are used in the market and which evidence remains permanently available for them is therefore a strategic business decision – not an editorial detail.

Procurement becomes a strategic data and risk partner

Many environmental and product claims are based on information from procurement: the recycled content of a material, the origin of a raw material, a supplier’s energy use, a product certification or information on reparability. Procurement thus becomes a key control point for external sustainability communications. Its management mandate is expanding: for relevant products, suppliers must be assessed not only on price, quality, ability to deliver and compliance, but also on the reliability of their product-specific environmental and circularity data.

A supplier that “produces sustainably” or supplies “climate-friendly materials” does not, by itself, provide sufficient evidence for specific consumer information. What matters is the exact subject of the statement, its scope, the method used, the basis for comparison and the currency of the evidence. “Contains 60 percent recycled content based on the plastic weight of the product, calculated as of 2026” is, for example, more verifiable than “particularly resource-efficient”.

The quality of supplier data becomes business-critical wherever it influences marketing, positioning or product approval. If suitable evidence is missing, this may call into question not only a communications issue, but also the availability of a claim, a product benefit or a planned market message. EmpCo does not require maximum ESG standards for every supplier. What matters is a proportionate risk assessment: the more visible and business-critical a claim is, and the more its evidence depends on supplier or upstream-supplier data, the higher the requirements for data quality and traceability.

Proportionate supplier management

EmpCo does not require maximum ESG standards for every supplier. For relevant products, the reliability of environmental and product data must be included in supplier assessments. Tenders and contracts should clearly specify which product characteristics must be substantiated, what scope a certificate covers and how current the information is. The more visible and business-critical a claim is, and the more its evidence depends on supplier or upstream-supplier data, the higher the requirements for data quality and traceability. It is important to weigh which evidence is material to the business model and when a claim should be qualified or no longer used in light of missing evidence. The goal is proportionate supplier management – not a blanket audit burden for every procurement transaction.

The supply chain becomes part of corporate responsibility

In many medium-sized companies, product texts are created across different functions: marketing drafts them, sales transfers statements into offers and procurement sources the underlying products. EmpCo turns this connection into a management issue when data status and wording do not match. Responsibility therefore does not lie with one department alone: procurement knows the supplier data, the specialist functions know the product characteristics, marketing and sales know the market claims, and executive management determines the risk tolerance. What matters is that statements are communicated externally only to the extent that they are robust for the specific product, the relevant period and the respective market.

Particularly critical are generic statements such as “sustainable”, “environmentally friendly” or “climate-friendly”, as well as statements about “recyclability”, “responsible sourcing” or CO₂ reductions when the reference point, method, scope or prerequisites remain unclear. Such wording is not automatically impermissible in every context; without qualification and evidence, however, it may be misleading. The decisive question is whether a claim describes a substantiated product benefit or merely suggests a general positive effect.

Conclusion: EmpCo is a matter of corporate governance

EmpCo does not require procurement and supply chain functions to generally realign their supplier portfolio. However, the Directive requires a reliable information chain as soon as environmental or product characteristics are communicated to consumers. Strategically, the issue is which promises the company wants to make in the market and which evidence it can reliably maintain over time. The quality of supplier and product data thus becomes a relevant part of supplier management. Anyone who formulates claims precisely and knows their data basis reduces legal and reputational risks without burdening procurement with unnecessary bureaucracy.

The central management message is this: It is not the loudest sustainability message that creates trust, but the statement whose scope and evidence the company can explain at any time.

What to do first

FIRST STEP: Capture all current environmental and product claims in one overview – each with its scope, data source, evidence and status of the latest update.

Only this fact check will show which statements are robust, where evidence is missing and which claims need to be qualified or removed from communications.

In brief

EmpCo does not start with a new supplier list, but with a fact check of existing product promises: bring the claim, evidence and accountability together – and communicate only what can be substantiated at any time.

Sources and legal notice

Note: This article explains the practical significance of the EmpCo requirements for procurement and supply chain and does not replace an individual legal assessment. The applicable law, the specific statement, the advertised product and the actual evidence are decisive.