Greenwashing

What it means

Greenwashing is misleading communication that makes a product, service or company look greener than it is. It may take the form of vague words such as green or nature-friendly without evidence, exaggerating one small detail, or leaving out significant negative impacts.

New EU consumer protection rules expressly ban generic environmental claims not backed by recognised performance, self-created sustainability labels without certification, and claims of product carbon neutrality based solely on offsetting. More detailed rules on substantiating claims are also in preparation.

Greenwashing is not limited to advertising. The same rules apply to packaging, the website, content marketing and reports for investors and banks. In corporate sustainability reporting, for example under CSRD, where topics are chosen by double materiality, an untrue claim is also a problem for assurance.

How it works in practice

We advise clients to use specific, verifiable data instead of adjectives: not eco-friendly packaging but packaging made of 80 percent recycled material according to the supplier’s certificate. Claims about emissions must rest on a calculation with a clear method and boundaries.

Products financed or sold as sustainable are measured against the EU taxonomy criteria. For green loans banks require evidence that the criteria are met and, if they are not, may raise the interest rate or claw back the benefit.

Prevention includes internal approval of marketing claims together with the evidence, and archiving both, as with other compliance obligations. Where the company repeats suppliers’ claims, we check their origin and whether the certificates are valid.

What to watch out for

Penalties for misleading claims are imposed by the consumer protection authority, and competitors or consumer associations can sue for an injunction. The greatest damage, though, comes from lost trust when it turns out the company claimed something it cannot prove.

There is a risk in the other direction too: some companies stay silent about their real measures out of fear. Truthful, substantiated communication about what the company does is not greenwashing, and it is valuable for ESG ratings and customers.