Skip to main content
European Climate Pact
News article30 June 20228 min read

Greenwashing: your guide to telling fact from fiction when it comes to corporate claims

Greenwashing: your guide to telling fact from fiction when it comes to corporate claims

We all know that we need to take climate action to reduce our carbon footprint and reach climate neutrality. People expect the authorities to pass laws to make it happen, but they are also keen to influence business practices through their own actions. As a result, more and more consumers are looking for information before buying, and companies are emphasising the greening of their products, services and activities, to attract customers.

But with as many as 42% of green claims likely to be exaggerated, false or deceptive, how can people trust them and be reasonably sure they choose authentic green brands?

We spoke to Lithuanian Climate Pact Ambassador Domantas Tracevicius and two companies who have made ambitious ‘North Star’ pledges under the European Climate Pact – Telefónica and Ørsted – about the ways to avoid greenwashing and ensure the credibility of green claims.


What exactly is greenwashing and why is it a problem? 

The definition of greenwashing ranges from small exaggerations to outright lies.

“Some industries say that they will be carbon neutral by 2050,” says Domantas Tracevicius, founder of the circular-economy NGO VšĮ Žiedinė ekonomika. “But we know that for them, it’s completely impossible to achieve.”

But it’s not just about lies – misleading claims can be considered a form of greenwashing too.

For example, a company might say that it’s reducing carbon emissions by switching from fossil fuels to plant oils but in reality, cultivating those plants might actually be causing deforestation and releasing more carbon into the atmosphere.

Companies also tend to simplify complex issues, use vague or immeasurable terms such as ‘good for the planet’, ‘natural’, and ‘ecological’ with no further proof, or even design logos or illustrations that look deceptively like a green label.

This matters because our capacity to tackle climate change also relies on our ability to trust the information we read and make informed decisions as a result.

By becoming more aware of how brands might communicate to their advantage, we can make consumer choices that are genuinely better for the climate. This, in turn, will make our response to climate change more effective.


Do companies always use false or exaggerated claims on purpose?

In a word – no. According to Domantas, there are two kinds of greenwashing: “unintentionally overinflating your green credentials, and doing it deliberately. Sometimes the people doing the PR are being misled by the companies themselves, and sometimes companies think something really is good when, in reality, it’s not.”

By undertaking a North Star pledge and making a commitment to ambitious energy and emissions reduction targets, businesses are also committing to the values of the European Climate Pact, not only in joining the fight against climate change, but also in taking a stand against environmental malpractices such as greenwashing.

Ida Krabek, Head of Global Sustainability at renewable energy company Ørsted, agrees that greenwashing is not always a deliberate tactic and can sometimes result from a misunderstanding or miscommunication: “There is no commonly accepted definition of net zero, nor any global mandatory disclosure mechanism, which creates a lot of grey areas for companies to navigate,” she says.

However, “this, in turn, makes space for unscrupulous actors that intentionally over-emphasise minor efforts or vague pledges,” which undermines genuine corporate climate action and deters others from joining the green transition. It also creates unfair competition among companies – it might be those who do less but communicate better that attract more customers.


How can you get a sense of whether a company is trustworthy or not?

Greenwashing isn’t just bad for the environment and consumers, it’s also bad for companies as it undermines the perception of their business and activities.

According to Spanish telecommunications firm Telefónica, ensuring credibility on sustainability issues is vital to growing its brand. The company publishes information about sustainability on its website and social media channels, in its shops, and even on the products themselves via informative labelling systems.

But how can you trust what’s on the label?

“Our labels are science-based and third-party validated,” says Telefónica’s Environment and Human Rights Director Maya Ormazabal Herrero. “Our mobile devices have an Eco Rating for their full-lifecycle environmental impact, which uses a methodology developed by experts in line with global, European and international standards, and uses a third-party to validate the information provided by suppliers.”

The Eco Rating was developed by a consortium of telecommunications providers, including Telefónica, with the participation of manufacturers and under the supervision of a publicly-owned Spanish agency, IHOBE.

When it comes to sustainability claims, “ensuring third-party verification is key,” agrees Ida, and insists: “Transparency and tangible action are key to trust.”

Genuine labels and certifications – for example EU schemes like the EU Ecolabel – are transparent about their criteria, the science behind them, and how they work.

One way you can distinguish between reality and fiction is to check whether the labels have an official website that includes the criteria used to evaluate a product’s impact on the planet. Has the product’s full lifecycle from raw material to its end of life been taken into consideration?

If you find a label or claim you think is fake, you can report it to your national consumer association.


Getting the message across, authentically

Communicating their green credentials isn’t always straightforward for companies.

“We try to pull out the key information while avoiding jargon and terms that require insider knowledge,” says Ida. “Our full sustainability report is quite long, so we have a series of short videos that bring out our decarbonisation efforts with suppliers.” 

Telefónica’s sustainability experts work closely on messages with the communications team, explains Maya: “Sometimes it’s not easy to provide environmental messages in a small space, so we add QR codes linking to more information.”

However, tackling greenwashing goes beyond communication: “It’s not only about what you show to your customers; you have to behave in the proper way and disclose all the information.”

Telefόnica has committed to the Planet Pledge framework, an initiative of the World Federation of Advertisers – an industry body encouraging transparent and honest marketing activities, to avoid greenwashing and to report any dubious activities.


Go local and think circular

It is vital to take the entire supply chain into account when analysing sustainability claims. One way to avoid the risk of falling victim to greenwashing is to buy local produce, because supply chains are shorter and fewer companies are involved. You can also look for companies that have factored in circularity.

“Look out for producers that make it easy for you to be planet-friendly, for example with deposit-return schemes for bottles, or information on how to recycle correctly,” Domantas says.

Thanks to the EU’s new Circular Economy Action Plan, part of the European Green Deal, products are also going to be more repairable, which lessens the need to buy new items and therefore reduces the chance of consumers falling for greenwashing claims. 

Domantas also suggests finding one label in your region that you trust and buying other products from the same company. But, he admits, “not everyone can afford that. It’s for governments to make sustainable products more affordable.”


The beginning of the end for greenwashing?

While greenwashing has muddied the waters for consumers in recent years, the future looks a lot brighter thanks to the overall understanding that the phenomenon has to be tackled at EU level.

By summer 2022, the European Commission will have put on the table a set of initiatives that will directly tackle greenwashing and make the impact of business activities on the climate and the environment more transparent.

Already last March, the Commission made a proposal which, if adopted by the European Parliament and the Council, will help to prevent businesses from sharing misleading communication about a product’s environmental or social impact.

It will also ensure that any environmental claims made by companies are accompanied by clear and verifiable commitments and targets, checked by an independent monitoring system. Vague claims or labels and the practice of not informing consumers about features that limit a product’s durability will also all be blacklisted. 

In addition, the Commission is planning another proposal this summer, on green claims, which will require companies to substantiate claims they make about the environmental footprint of their products and services by using standard methods for quantifying them.

The aim is to make the claims reliable, comparable and verifiable across the EU to reduce greenwashing. This should help consumers and investors make more informed decisions, and increase consumer confidence in green labels.

Last but not least, new reporting obligations for companies will enter into force soon, likely in 2023, regarding their environmental and climate impacts.

For Domantas, regulation like this is the key to success. “Companies should have to support any claims they make with proof,” he says. He believes EU regulations on the claims made about the nutritional benefits of foods have led to fewer misleading statements, and thinks the same could be achieved with greenwashing.

While greenwashing, accidental or intentional, is something we should all be wise to, overall Domantas is positive about the future: “The real winners will be the producers of green products, because that’s what consumers want.”

Spotting instances of greenwashing is just one step in leading a more climate-conscious life, and the European Climate Pact is here to help you to make further changes to your lifestyle. Explore the available resources and learn more about the climate challenges we face, the steps we can take to address them, and the way you can talk about it with family, friends and colleagues.


Too good to be true? Five ways you can fight greenwashing

  1. Beware of unclarity: Keep an eye out for vague and immeasurable terms such as ‘natural’ and ‘eco-friendly’ which aren’t supported by transparent and scientific proof.
  2. Check the label: Look for labels that use third parties to double-check the claims made.
  3. Be diligent: If it seems too good to be true, it might well be. Research the issue and the industry using reputable sources and decide for yourself.
  4. Look for actions, not words: Observe what a company does – not just what it says. Can all of the products it offers be considered environmentally friendly? Has the company invested in recyclable packaging?
  5. Buy local: The shorter the supply chain, the less likely it is that green claims will get lost, confused or misrepresented.



Publication date
30 June 2022