By Alexandra, Helena, Gennaro and Isabella
“Eco-friendly”.“Sustainable”.“Natural” These words are everywhere — on packaging, websites, and ad-campaigns. But are they always representing the truth? Being an environmentally friendly business is increasingly popular, but not every company does what it claims to do. In fact, many companies use misleading green claims, just to appear sustainable when in reality they are not. This act of pretending is what we call greenwashing. It threatens real progress on climate goals. In this post, we break down what greenwashing is, its impact, how to recognize it, and an example of how the EU is ‘fighting back’.
What is Greenwashing?
Greenwashing refers to the practice of misleading consumers about the environmental practices of a company or the environmental benefits of a product or service. This can involve false claims, exaggerations, vague language, selective disclosure, and even visual manipulation like overusing green colors or nature imagery.
It is a practice of making misleading and false claims, convincing the public to think that the company is contributing to the protection and preservation of the environment.
But it’s not just about outright lies — it can also involve greenhushing, or the omission of relevant environmental harms while promoting minor or unrelated “green” efforts.
“In 2021, 42% of the online claims from various businesses were exaggerated, false or deceptive” according to a screening conducted by the European Union and National Consumer Authorities.
Greenwashing can take many different forms, but it usually happens when a company seeks to promote its products or services. Businesses use misleading labels, or unclear language, such as calling their product “eco-friendly” without explaining what it actually means. Some produce false data to improve their image, or selectively highlight one “green” effort to look good, while hiding their other practices that are harmful to the environment. Others rely on misleading visuals and graphics, such as using pictures of nature or overusing the color green.
Our Role in the Green Fight: A practical Guide
So how can you, as a consumer, spot greenwashing? Here is a breakdown of some tips that may be useful:
1. Start by checking for reliable third-party certifications, such as the EU Ecolabel. Be cautious of fake or self-invented eco-labels, which companies may use to simulate credibility. For example, in the “Six Sins of Greenwashing” report TerraChoice, 2007 highlights common deceptive tactics, including “the sin of the imaginary friend”, using fake third-party endorsements.
2. Be cautious of vague and unclear terminology
Terms like “eco-friendly” or “green” without clear explanations or evidence might signal greenwashing. Genuine sustainable brands usually specify exactly why and how their products or services are environmentally friendly.
3. Look beyond attractive slogans and carefully evaluate transparency
Real sustainability means companies provide thorough and detailed information about their overall environmental impact—not just selectively highlighting one minor positive action. Furthermore, truly sustainable businesses back up their environmental claims with solid evidence and detailed reports. Information about emissions or resource usage should be easily accessible and clearly documented. But this isn’t mandatory yet. Full supply chain disclosure is not required until the Corporate Sustainability Due Diligence Directive (CSDDD) comes into force. Finally, remember that visuals can also be deceptive. Overusing green colors or nature-themed imagery might make products appear more sustainable than they actually are. Such tactics are common strategies used to distract consumers from examining the company’s true environmental impact.
Moreover, consumers often lack the climate literacy needed to interpret sustainability reports, even when made available. A recent study shows that more information doesn’t necessarily lead to better understanding or choices.
Still, the abovementioned three quick steps have been summarized below:
When Green Turns Grey: How Greenwashing Harms the EU
The consequences of greenwashing are felt at every level—from individual consumers to the broader European economy and regulatory frameworks.
Environmental Consequences
Greenwashing has severe environmental consequences, undermining the progress towards the European Green Deal and the Paris Agreement goals to transition to a low carbon economy. It diverts attention and resources from genuinely sustainable initiatives, as consumers become disillusioned and may allow companies to prosper by pretending that they’re green—without doing the work.
Consumer Deception
Greenwashing not only impacts the environment—it also misleads consumers. When companies falsely claim to be “green” or “eco-friendly,” it becomes more challenging for people to distinguish which products or brands are truly sustainable. As a result, the meaning of these terms becomes weaker and more confusing. Additionally, when consumers realise that despite their efforts, they were misled by a company it also erodes their trust. They may feel discouraged, frustrated, skeptical or even stop trying to make environmentally responsible choices which may halt meaningful change.
Distorts Financial Markets
Greenwashing isn’t just bad PR—it’s bad for markets. Investors may want their money to align with their environmental values. But when companies falsely market their goods or operations as “green”, trust disappears. This creates uncertainty, discourages sustainable investing, and destabilizes financial markets. As a result, capital may flow to undeserving companies, while those that are truly working towards sustainability struggle to compete. In the long run, this risks destabilising efforts to fund the green transition – an effort that relies not only on central banks, but also on public investment, private capital markets, and citizen engagement. According to European Commission estimates, achieving the EU’s 2030 climate and energy targets will require additional annual investments of approximately €620 billion, mobilised through a combination of national budgets, EU funding instruments (such as InvestEU and the Innovation Fund), and private financing.
From Claims to Consequences: The EU’s Legal Response to Greenwashing
Among the many legislative instruments adopted by the EU in the context of the “Green deal”, one of the most recent is the Greenwashing Directive which amends the Unfair Commercial Practice Directive (UCPD) and is central for consumers. It introduces specific rules on companies’ sustainability claims, with the aim to contribute to the EU’s green transition by empowering consumers to make informed purchases using reliable sustainability information about products and traders. The Directive includes a list of claims that are in any event considered “unfair” and prohibited, such as the use of “sustainability” labels that are not based on an independent, third-party certification scheme. This Directive is a noteworthy advancement as it will have a significant impact on how companies communicate their environmental efforts, thereby increasing safeguards for consumers.
However, even more ambitious is the Green Claims Directive which goes a step further by introducing detailed requirements for the substantiation and verification of voluntary environmental claims. Under this proposal, companies will be required to carry out scientific assessments and undergo third-party verification before making environmental claims about their products or services.
…So, the next time you see a product labeled “green,” ask yourself: is it really? Together, through awareness and accountability, both policy and public pressure can turn the tide against greenwashing – for good.
