EXTENDED ABSTRACT Today, threats arising from environmental problems bring about an increased sensitivity at the global level. In this period where production, consumption, and investment decisions have been reshaped in line with the environmental sensitivities, the number and the variety of labels and reporting initiatives regarding the environmental performances of businesses and products have increased. Not surprisingly, as ‘green sells well, there has also been an observed increase in ‘greenwashing’ practices, where businesses deliberately give deceptive impressions about their environmental impacts or benefits, creating an increased consumer and investor skepticism for green products and green businesses. Also, greenwashing misleads market actors and does not give due advantage to those companies that are making the effort to green their products and activities. Ultimately, greenwashing constitutes an important barrier for transition to a green economy. To tackle this issue, the European Green Deal states “Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment”. In 2020, the Commission announced several interlinked initiatives under the Circular Economy Action Plan, including an initiative to combat greenwashing and substantiate green claims. This study focuses on the ‘Initiative on Substantiating Green Claims’, addresses the problem of greenwashing and examines the scope and possible effects of the initiative, and discusses the role of the initiative and green transition in ensuring sustainability. The ‘Initiative on Substantiating Green Claims’ aims to ensure that information regarding the environmental performance of businesses and products are reliable, comparable, and verifiable across the EU, while it also aims to deal with deceptive claims and greenwashing practices. Providing reliable information on environmental impacts is crucial under the scope of the new EU legislation such as the EU Taxonomy Regulation as well. Hence, the use of standard methodologies for environmental footprint calculations stands out more. As of 30 March 2022, the latest development has been the announcement of a new circular economy package by the Commission, which puts ‘sustainable products’ in the center. Through this package, the Commission also tabled a legislative proposal to empower consumers in the green transition, which introduces targeted amendments to horizontal EU consumer law to provide enhanced protection against greenwashing practices along with better information on product durability and repairability. Moreover, the environmental impacts and sustainability features of products along the value chains would be provided in digital product passports within the scope of the ‘Sustainable Product Policy Initiative’. In addition, the Commission is working on proposing more specific rules on green claims relying on the product and organization’s environmental footprint methods, with adoption planned in autumn 2022. It is desired that consumers remain active proponents of this green transition in the EU, and all these rules are envisaged to prevent deceptive information and greenwashing. As misleading and vague claims are prohibited, more reliable and truly eco-friendly products and businesses will come to the fore instead of products and businesses ‘acting as if green’. Conscious consumers will be able to choose products that are really better in terms of environmental performance and impacts; products with longer life and non-toxic features; products that consume less energy, create less waste, and products that are more recyclable. Similarly, investments would be directed to the right businesses, and so green businesses will have a competitive advantage. Hence, through these efforts, an impetus is expected for green transition. On the other hand, no matter how environmental-friendly the products are, if the industry continues to grow in terms of investment and consumption, this time through the promotion of the green products, environmental pressure will continue in the long run and the impact of these efforts will be limited in terms of sustainability. To sum up, while the Initiative on Substantiating Green Claims is promising in terms of transforming consumption patterns in a more sustainable direction, it is crucial that the rate of production and consumption must be slowed down for sustainability; otherwise, a vicious circle will continue under the ‘green’ image of the system, in which economic sustainability overtakes environmental sustainability.