Greenwashing
Greenwashing refers to misleading or unsubstantiated marketing and sustainability claims that present a company, product, or service as more environmentally friendly than it actually is.
Greenwashing occurs when companies create the impression of better environmental performance than they actually deliver, using selective, vague, unsubstantiated, or simply false statements. Typical forms include unspecific blanket claims such as 'climate-neutral' or 'eco-friendly' without a verifiable methodology, highlighting a single green feature while overall impact remains high, misleading labels and self-created seals, and statements about future goals for which no credible implementation plan exists. Greenwashing not only harms consumers but also distorts competition against companies that genuinely invest in sustainability.
The regulatory framework against greenwashing has been significantly tightened in the EU. Under unfair competition law, misleading environmental claims are already actionable through the Unfair Commercial Practices Directive (2005/29/EC) and, in German law, through the Act Against Unfair Competition (UWG). Directive (EU) 2024/825 (the 'Empowering Consumers Directive') expressly prohibits generic environmental claims without recognized evidence as well as sustainability labels without a certified or government-backed certification scheme. In addition, the planned Green Claims Directive is intended to require prior verification and substantiation of explicit environmental claims. In parallel, the CSRD and the ESRS raise the requirements for the robustness and auditability of published sustainability information.
To avoid greenwashing, sustainability claims must be truthful, specific, complete, and verifiable. Claims should rest on a recognized, transparent methodology (such as life cycle assessments under ISO 14040/14044 or the GHG Protocol), clearly identify their scope (product, site, or the entire company), and distinguish between results achieved and future targets. Terms like 'climate-neutral' require disclosed assumptions on accounting boundaries, the reduction pathway, and any offsetting. Consistently linking marketing claims to the audited disclosures in the sustainability report, together with an internal approval and documentation obligation, are core building blocks of effective greenwashing prevention.
Legal Basis
Directive (EU) 2024/825 (Empowering Consumers Directive); Unfair Commercial Practices Directive 2005/29/EC; Sections 5, 5a UWG; planned Green Claims Directive; CSRD (Directive (EU) 2022/2464) in conjunction with the ESRS
Practical Example
A consumer goods manufacturer advertises a product line on the packaging as '100% climate-neutral', where the claim rests solely on the purchase of offset certificates and the company's own Scope 1 to Scope 3 emissions have not been reduced. The compliance officer reviews the claim against the new requirements, finds that neither the accounting boundaries nor the reduction pathway are disclosed, and initiates a correction: the claim is reworded to reflect a concrete, evidenced reduction, the methodology is documented, and the offsetting share is transparently disclosed in order to avoid a competition-law and reputational risk.