Greenwashing and how does EU solves this problem
You've probably seen t-shirts made from plastic bottles or recycled materials. Unfortunately, often only 1% or less of the material used actually has this nature.
Here are some statistics provided by the European Commission:
53% of green claims provide vague, misleading, or unsubstantiated information.
40% of claims lack supporting evidence.
Half of green labels offer weak or nonexistent verification.
In the EU, there are 230 sustainability labels and 100 green energy labels, with varying levels of transparency.
In March 2023, the European Commission published a proposal for a directive aimed at regulating Green Claims, which are often made by companies to qualify their products in terms of their "environmental value," with the goal of actively combating the phenomenon of Greenwashing.
Step by step...
What is the "greenwashing"?
"Greenwashing" is now a widely used term because there is increasing attention on unverifiable claims regarding the climate impact and decarbonization of companies. Greenwashing refers to a communication or marketing technique employed by companies, institutions, and organizations that portray their activities as environmentally friendly, emphasizing the positive effects of certain initiatives while simultaneously attempting to conceal the negative environmental impact of other aspects of the business or the company as a whole.
In particular, common characteristics of greenwashing in most cases include:
Lack of specific information or data to support the claims.
Declarations of information and data as certified when they are not recognized by authoritative bodies.
Emphasis on isolated aspects of what is communicated.
Use of vague information that creates confusion among consumers.
Potential use of false or counterfeit labels.
Assertion of environmental claims that are not true.
However, this is not a new phenomenon. It was first mentioned by American environmentalist Jay Westerveld in 1986 when he used it to criticize hotel chains that emphasized the environmental impact of laundry to encourage guests to reduce towel usage while concealing an underlying economic motive (related to cost savings).
2 types of the Greenwashing
According to Domantas Tracevicius , there are two types of greenwashing: one unintentional and one deliberate. Sometimes, public relations professionals are misled by companies themselves, and other times, companies believe that a certain type of action is genuinely effective and positive when, in reality, it is not.
Fabio Iraldo, a professor at Bocconi University in Milan and an associate professor at the Institute of Management at the Sant'Anna School of Advanced Studies in Pisa, shares this opinion. According to the professor, it often happens that a company is fascinated by a measure it wants to adopt but does not evaluate its overall environmental impact. For example, in some cases, the application of a circular business model may not be the best option in terms of reducing the environmental impacts caused by the company: the use of certain recycled materials may require treatment and logistics processes that ultimately result in a worse environmental impact.
The ways to "greenwash":
Deceptive Environmental Imagery.
This type of greenwashing occurs when product labels or advertising campaigns use nature, animals, leaves, the color green, and so on, on their products or to indicate their services. These images are usually associated with a message of sustainability. When used deliberately, such images give consumers the impression that the product or service is environmentally friendly, while the reality is often very different. For example, most bottled water brands feature images of lush mountains or clean, crystalline streams. The reality is that single-use water bottles contribute significantly to global plastic waste, causing a serious environmental disaster.
Bait and Switch.
The "bait and switch" greenwashing occurs when a company offers a limited line of environmentally friendly products or services to attract environmentally conscious customers and introduce them to their brand (the bait). Once the customer is "hooked," they are presented with a much broader range of non-eco-friendly products (the switch). For example, a wood industry retailer may advertise 300 different types of products, but only one is certified by the Forest Stewardship Council (FSC) – indicating environmentally responsible, socially beneficial, and economically sustainable forest management – yet the FSC certification is used in all advertising campaigns. This leads customers to believe that the entire range of wood products offered is FSC certified.
Irrelevant Claims.
Greenwashing that relies on irrelevant claims occurs when companies use statements that appear to be related to environmental sustainability to give the impression of being Earth-friendly, while the claims are entirely irrelevant. For example, when a deodorant company proudly declares on the packaging that its products are CFC (chlorofluorocarbon)-free, it is making an irrelevant claim because CFCs have long been banned by law, so every deodorant is legally CFC-free.
Clickbait.
This term is used to describe a mechanism where users are enticed to click on a link by promising content that is different from what was initially advertised. In the world of greenwashing, clickbait is used when a company or individual seeks to profit from customers by making false claims. This often involves labeling products as "organic," "recyclable," "biodegradable," "certified," and so on, when they simply are not. Some companies even go as far as inventing certifications or accrediting bodies. For example, an energy company provides natural gas certified as non-toxic by the European Union Gas Board Of Awesome Sustainable Brands, which is a nonexistent entity.
These are just some of the forms of greenwashing, but they make it abundantly clear that there is a widespread problem.
How Greenwashing can damage companies
Everyone knows that greenwashing should be avoided. However, this phenomenon continues to occur with increasingly severe consequences for both companies and consumers, as well as society as a whole. Often, insufficient attention is paid to communication practices in this area due to a lack of a deep understanding of the risks and damages caused by greenwashing.
Here are the 6 negative effects on companies :
Damage to corporate reputation and loss of consumer trust.
Loss of B2B partners.
Being subject to an investigation due to misleading claims.
Risk of legal action.
Financial losses.
Greenhushing.
Greenwashing in Legislation
Source: European Commission
On March 22nd, the European Commission presented a proposal for a directive on green claims, which are ecological statements about products.
The Commission's efforts stem from the need to curb the phenomenon of greenwashing and reverse the findings of a Commission study provided in the working document CWD(2022) 85 final, which found that 53.3% of the environmental claims examined in the EU were vague, misleading, or unfounded, and that 40% were entirely unfounded.
The proposal for a directive on green claims establishes the requirements that businesses must adhere to when promoting labels and environmental performances that imply a positive environmental impact, a lesser negative impact, no impact, or an improvement over time for their products, services, or organization from a sustainability perspective.
The proposal requires that these ecological statements, such as "packaging made from 30% recycled plastic," "bee-friendly juice," "eco-friendly t-shirt," or "commitment to reduce CO2 emissions from the production of this product by 50% by 2030," be substantiated and supported by data and comprehensive assessments.
According to the Directive Proposal, companies must provide scientific evidence of the truthfulness of their green claims, considering the entire product life cycle. Environmental labels, which Brussels estimates to be at least 230 currently, must be truthful, transparent, and verified by third parties. Scientific evidence for green claims must be transparent and made available to everyone via QR code or on the company's website.
Companies using unverified environmental claims to market their products could face fines of at least 4% of their revenues or exclusions of up to one year from participating in public tenders or subsidies.
Development of the Legislation
On September 19th, the Council and Parliament reached a provisional political agreement on the Green Claims Directive. The proposal aims to strengthen consumer rights by amending the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive (CRD).
The provisional agreement maintains the main objectives of the directive but introduces significant improvements. In particular:
It enhances the credibility of sustainability labels by defining key elements of the certification system upon which they must be based, unless established by public authorities.
It increases transparency and monitoring of statements regarding future environmental performance.
It includes in the list of prohibited commercial practices unfair claims based on greenhouse gas offsetting, thereby preventing professionals from claiming that a product has a neutral, reduced, or improved environmental impact based on unverified offsetting programs.
It clarifies the responsibility of professionals concerning information (or lack of information) about planned obsolescence, unnecessary software updates, or unjustified obligations to purchase original spare parts. These practices will be prohibited, but the compromise text clarifies that professionals are only responsible if there is information available about the design features leading to such situations.
It introduces a harmonized label with information on the commercial warranty of durability offered by manufacturers, including a reference to the legal conformity warranty. In addition, a harmonized notice will be displayed in stores and on websites to provide information on the legal conformity warranty.
It grants Member States sufficient time to adapt to legislative changes, with a transposition period of 24 months.
The proposed directive addresses the credibility of environmental claims. Claims must be clear, accurate, and verifiable. Criteria include considering the entire product lifecycle and presenting substantial evidence to support the claims. Misleading marketing techniques, such as using words or images to create false impressions, are prohibited.
This agreement awaits formal adoption, with a European Parliament vote scheduled for November. Member States will have 24 months, until 2026, to comply with the new legislation.
The strong focus on environmental, social, and governance sustainability is not a passing trend but a long-term structural shift.
Companies must start addressing this challenge immediately through staff training, promoting a culture of sustainability, conducting in-depth internal analysis, developing ESG strategy projects, and preparing sustainability reports.
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