“Natural,” “eco-friendly,” “green,” “environmentally conscious,” “zero impact”: these expressions are common expressions on product labels, company websites, advertising campaigns and even sustainability reports. However, these words do not always correspond to a genuine environmental commitment.
The problem arises when such claims are not backed by verifiable data or consistent business practices. In these cases, we talk about greenwashing: when a company communicates an environmental commitment that does not reflect its actual actions.
The numbers confirm this phenomenon: in 2020, the European Commission found that 53.3% of the environmental claims examined were vague, misleading or unsubstantiated.
In this article, you will learn how to recognize greenwashing, understand the risks it poses for your company and discover how to build transparent, regulation-compliant communication that strengthens consumer and stakeholder trust.
What is greenwashing and how to recognize it
Greenwashing is a deceptive communication practice adopted by companies, organizations, or institutions to portray their activities, initiatives, or products as sustainable, even when their actual environmental commitment is limited or nonexistent.
Recognizing the signs of greenwashing is essential to assess whether a company’s communication aligns with real sustainable practices — or merely builds a “green” façade.
Key warning signs to watch out for include:
- vague environmental claims like “eco-friendly” or “chemical-free” without verifiable supporting data;
- promises of future goals without specific action plans or deadlines;
- overemphasis on minor sustainable initiatives while omitting to disclose more significant negative impacts;
- use of natural imagery and green colors to evoke ecology without concrete backing;
- promotion of irrelevant advantages, such as labeling products “CFC-free” when these substances have already been banned for years.
The 7 sins of greenwashing
A useful tool for identifying greenwashing comes from an international framework developed by TerraChoice in 2010.
The framework identifies the seven sins of greenwashing — each representing a way companies may mislead consumers about their sustainability efforts:
Here are the seven sins identified in the framework:
- hidden trade-off: presenting a product as sustainable by focusing on a single positive attribute while ignoring other negative environmental impacts;
- no proof: making environmental claims without verifiable data or third-party certification;
- vagueness: using generic terms like “eco-friendly” or “natural” without clear, measurable criteria;
- worshiping false labels: displaying fake or unofficial sustainability labels to give a misleading impression of certification;
- irrelevance: highlighting environmental features that are already legally required, such as being “CFC-free”;
- lesser of two evils: Promoting a product as greener than competitors within a harmful category, ignoring the overall industry impact;
- fibbing: making blatantly false environmental claims, such as stating a product is “CO₂-neutral” without any supporting evidence.
Now that you know what to look for to detect misleading communication, let’s explore the risks greenwashing poses to businesses.
The risks of greenwashing for your company
Greenwashing can represent a serious reputational risk for your company.
If consumers, investors, or other stakeholders discover they’ve been misled by vague or deceptive environmental claims, the trust built over time can collapse, resulting in customer loss and significant brand damage.
Beyond reputation, greenwashing also carries legal risks: in Europe, misleading communication can result in fines, public warnings, and mandatory corrections.
Building transparent environmental communication is therefore essential to protect your company’s reputation and avoid legal penalties.
How to avoid greenwashing: 4 practical tips
Below are four practical tips, including examples of mistakes to avoid and good communication practices.
1. Use specific and verifiable data
Avoid generic statements and make sure every claim is supported by documentation, audits, or verifiable certifications.
Example:
- Avoid saying: “We use sustainable materials.”
- Say instead: “60% of our packaging is made from recycled paper.”
2. Explain your data calculation and reporting methods
Clearly indicate how data is collected and calculated, which standards are used (for example, the GHG Protocol), and which sources support your information. This approach helps stakeholders verify and compare your data.
Example:
- Avoid saying: “We calculated our emissions.”
- Say instead: “Our Scope 1 and Scope 2 CO₂ emissions were calculated in accordance with the Greenhouse Gas Protocol.”
3. Set clear and measurable sustainability goals
When communicating your sustainability goals, make sure they are specific, measurable, and time-bound. This allows stakeholders to understand your intentions and monitor progress over time.
Example:
- Avoid saying: “We aim to become sustainable in the next few years.”
- Say instead: “We plan to reduce emissions from our company fleet by 20% by 2026.”
Don’t forget to also communicate the concrete actions that will help you reach this target.
4. Request external verification of your data
To ensure that the information you share is reliable, you can entrust data verification to an independent third party, such as a certifying body or auditor. This process helps check the accuracy, completeness, and consistency of your data, making your communication more transparent and credible.
Following these principles will not only reduce the risk of greenwashing but also help align your company with European regulations.
What the EU Directive 2024/825 covers against greenwashing
To tackle greenwashing, the European Union introduced Directive 2024/825/EU, which prohibits potentially misleading practices toward consumers.
These include:
- using generic expressions like “eco-friendly” or “environmentally friendly” without proving a high level of actual environmental performance;
- using sustainability labels not based on certification systems or not recognized by public authorities;
- attributing environmental benefits to an entire product when they apply only to one component, such as the packaging;
- presenting as advantages features that are actually legal requirements for all products in the same category.
Although the directive is not yet binding, Member States must transpose it by March 2026, and companies will have until September 2026 to comply.
It is therefore advisable for your company to start reviewing its sustainability communications now to anticipate these obligations and avoid penalties.
Corporate responsibility beyond greenwashing
Sustainability is not a temporary choice but a responsibility that requires commitment, method, and transparency.
A genuine journey starts with one simple question: “What actions can I communicate to demonstrate my company’s commitment?”
From there, you can build a strategy based on facts rather than promises — avoiding all the risks associated with greenwashing.
A good first step is to draft a sustainability report: a tool that allows you to measure results, communicate clearly, and show stakeholders your company’s environmental, social, and governance (ESG) commitment.
If your company is ready to begin this journey, our team can support you in building an authentic sustainability strategy grounded in verifiable data and aligned with current regulations. Get in touch with us.
Greenwashing: how to recognize it and how to avoid it in your company