TL DR: Moving beyond greenwashing means more than avoiding penalties; it’s about creating real impact. By backing up sustainability claims with action, businesses can strengthen their reputation and lead the way in responsible innovation. Prioritizing genuine environmental responsibility not only builds trust but also ensures compliance with evolving regulations.
Introduction to greenwashing
Businesses worldwide are using green marketing strategies to satisfy the consumer demand for more sustainable products and services. However, companies must be mindful not to fall into the trap of greenwashing, which can lead to credibility issues and legal consequences.
How can you as a company ensure that your claims are strong and avoid greenwashing? We are here to help you. This article will guide you through a breakdown on the topic of greenwashing and provide you with useful tips to maintain transparency through your business practices.
What is greenwashing
Sustainability is more than just a trend: it’s a responsibility and an opportunity for businesses to create real impact. However, with the rising demand for eco-friendly products and services, some companies fall into the trap of "greenwashing", a practice of making misleading claims about environmental benefits. According to the United Nations, greenwashing occurs when businesses portray themselves as more sustainable than they actually are, often through vague wording, misleading branding, or exaggerated statements.
But here’s the good news: when done right, sustainability is a powerful way to build trust, attract loyal customers, and future-proof your business. The key is to communicate your efforts transparently and authentically.
Best practices to build a transparent and credible sustainability strategy
Sustainability communication should not be complicated or intimidating. To make it easier, we've created a detailed guide to help your business communicate its sustainability efforts with clarity and authenticity.
More precisely, by following these best practices, you can build a strong reputation and ensure your sustainability efforts are both credible and effective:
Be transparent
Transparency is the root of credibility. Consumers (and consumer protection directives) appreciate businesses that share real data and impact. Here is what you can do:
Provide precise numbers and measurable impact and avoid vague or exaggerated claims.
Publish sustainability reports covering your company’s progress and goals.
Embrace the journey
Sustainability is a long journey, not a simple one-time achievement. With some simple tricks, you can ensure that your efforts are communicated openly, rather than emphasizing a minor green initiative highlight the bigger picture:
Prioritize the most relevant challenges and impact of your business.
Be honest on the journey ahead: celebrate milestones and be open on what your company still needs to improve.
Gain trust with independent verification
Obtain third-party sustainability certification to add credibility and show your commitment to sustainability.
Look for recognised sustainability certifications and explain their criteria.
If you are working toward a certification communicate the journey, rather than using non-verified labels.
Use clear and honest language
Customers are becoming increasingly savvy about sustainability claims. Here is how to make sure your claims are credible and transparent:
Use precise and verifiable terms, supported with evidence.
Avoid overgeneralising like “100% sustainable”.
Be mindful with your visuals: do not use green-themed branding to imply sustainability if it is not in the product or service.
By taking a transparent and strategic approach, you can turn sustainability into a strength rather than a challenge. Customers don’t expect perfection, but they do value honesty and meaningful progress.
Ready to level up your sustainability strategy? Explore our article on sustainability communication to take the next step with confidence.
Green marketing or greenwashing? Real-world examples:
Greenwashing is particularly problematic when businesses treat sustainability as a green marketing strategy rather than a genuine commitment. Some big multinationals were caught in misleading advertising on sustainability claims. Here are some notable examples:
ING's green promises
ING Bank has been accused of greenwashing in their advertisements twice in a brief period.
Despite their green promises and sustainable image, the bank invests three quarters of its budget in fossil fuel energy, moreover it contributes to deforestation by investing in the paper industry, soy cultivation and meat sector.
This contrasts their public statements about sustainability and climate action.
IKEA
IKEA, once seen as a sustainability leader, faced greenwashing accusations after being linked to illegal logging in Ukraine. NGO Earthsight exposed how the Forest Stewardship Council (the certification IKEA relies on) did not prevent the use of conflict wood.
IKEA’s beechwood chairs were made from illegally sourced timber in Ukraine’s Carpathian forests, home to endangered wildlife.
The controversy deepened when IKEA demolished a sustainable store to build a “more sustainable” one. Despite these issues, IKEA still holds a strong reputation for sustainability, and FSC stays the industry’s gold standard, raising concerns about greenwashing in the timber sector.
FrieslandCampina's misleading labelling
FrieslandCampina came under fire for their 'Weidemelk' label, which paints a rosy picture of their milk production. Although the label suggests that the cows are grazing in the pasture, it hides the actual environmental impact of large-scale milk production, for example the use of soy feed to achieve greater milk production. Rainforests in South America are dangerously being cut down to produce more soy, resulting in worrying consequences on the biodiversity and on the population.
The situation escalated when the Advertising Code Commission had to reprimand the company for misleading health claims about their Sterke Start yogurt, further undermining trust in the company's sustainability communication.
The Impact of greenwashing on the environment and society
Sustainability is a powerful force for positive change, but greenwashing threatens to undermine its progress. When companies exaggerate or misrepresent their environmental efforts, they don’t just mislead consumers; they slow down the transition to a truly sustainable economy.
Being caught in greenwashing can lead to regulatory fines and lawsuits, moreover consumer trust is damaged. This can also result in internal issues in companies, as employees might disengage due to perceived ethical problems.
Turning risk into opportunity
The good news? Businesses that commit to sustainability stand to gain the most. Companies that back up claims with data, communicate progress transparently, and embrace continuous improvement will build stronger customer loyalty, attract top talent, and future-proof their brand against regulatory changes.
Legislation against greenwashing: EU Green Claims Directive
We have already covered the topic in detail in an earlier article, be sure to check out our full analysis on the Green Claims Directive for a deeper dive.
In short, the EU Green Claims Directive, approved in 2024 and set for implementation by 2026, aims to prevent greenwashing by enforcing transparency in corporate sustainability claims. Companies must provide clear, evidence-based information or face fines of up to 4% of annual revenue.
Key requirements:
No misleading claims: Environmental claims must be backed by scientific evidence.
Regulated eco-labels: Only verified labels are allowed.
Carbon offset transparency: Companies must clearly differentiate between real emissions reductions and offset initiatives.
For carbon credits, businesses must prioritize reducing emissions at the source and ensure transparency in their offset projects. Adhering to trusted standards will be essential for credibility.
Conclusion
With stronger regulations on the horizon, businesses have an opportunity to lead by example. Instead of seeing transparency as a burden, forward-thinking companies recognize it as a competitive advantage.
By embracing transparent sustainability, your business won’t just comply with regulations. You’ll earn consumer trust, stand out, and drive change in responsible business practices.
The future of business is sustainable. Will you lead the way?
