Avoiding Greenwashing: What Regulators and Consumers Are Looking For

Companies want to communicate sustainability work, but the regulatory landscape has made this risky. Claims that were unremarkable five years ago are now actively challenged by regulators, consumers, and competitors.

This guide covers what greenwashing actually is, what regulators are looking for, what claim types are defensible, and how to communicate sustainability progress without exposure. The voice is practical and risk-aware — not preachy, not cynical. The reader has a legitimate need to communicate sustainability work; this guide helps them do it without exposure.

What greenwashing actually is

Greenwashing is making a sustainability claim that is misleading, unsubstantiated, or so vague it cannot be evaluated. Five recognised categories:

• False claims — saying something untrue (e.g., "100% renewable" when it's 60%).
• Unsubstantiated claims — saying something true but without evidence to back it (e.g., "carbon neutral" without disclosed methodology).
• Vague claims — saying something that sounds positive but means nothing (e.g., "eco-friendly" without scope).
• Selective claims — emphasising one positive while hiding negatives (e.g., touting a single facility while ignoring company-wide performance).
• Misleading visuals — green imagery, leaves, planet visuals attached to non-sustainable products.

All five are increasingly enforced. The legal framework varies by jurisdiction; the principle is consistent.

The regulatory landscape

The major regulatory frameworks affecting sustainability claims:

European Union

• EU Green Claims Directive — proposed regulation requiring substantiation, third-party verification, and standardised claim categories. Covers all environmental claims by businesses operating in the EU.
• Unfair Commercial Practices Directive updates — bans misleading environmental claims under existing consumer protection rules. Already in force.
• CSRD / ESRS — connects greenwashing risk to mandatory disclosure. Marketing claims are expected to align with disclosed performance; divergence is itself a flag.

United States

• FTC Green Guides — non-binding guidance on environmental marketing claims, with updates pending. Covers specific claim types: "biodegradable," "compostable," "recyclable," "ozone-friendly," "renewable energy." Enforced through the FTC's authority over deceptive trade practices.
• SEC enforcement — climate-related disclosures and "ESG fund" labelling are under SEC scrutiny.
• State-level enforcement — California has been particularly active on sustainability claims.

United Kingdom

• CMA Green Claims Code — published guidance with active enforcement by the Competition and Markets Authority.
• ASA rulings — the Advertising Standards Authority has issued multiple high-profile rulings against companies for unsubstantiated environmental claims.

Other jurisdictions

Australia (ACCC), Canada (Competition Bureau), and emerging frameworks in MEA and APAC are following the same direction. The trend is global; the specific rules vary.

What kinds of claims get challenged?

The high-risk claim types and what regulators look for. Each has a defensible alternative.

"Carbon neutral" / "Climate neutral"

Challenged when methodology isn't clear. The EU has proposed effectively banning carbon-neutral claims at company level (only product or specific scope claims would survive), and several national regulators have followed suit.

Defensible alternative. Specify what's neutral (a product, a facility, not the entire company), the methodology used, and the role of offsets vs reductions. State whether the claim relies on residual offsetting or on actual operational reductions.

"Net zero"

Challenged when forward-looking targets are presented as achievements, when timelines are unclear, or when residual emissions aren't addressed.

Defensible alternative. Specify the target year, the base year, the scope coverage, the methodology (e.g., SBTi-aligned), and the offset strategy for residuals. Use achievement language only after achievement, not for forward-looking commitments.

"Sustainable"

Too vague to be a standalone claim. Regulators across jurisdictions reject undefined "sustainable" claims.

Defensible alternative. Be specific about what's sustainable and how it's measured. "Made from 80% recycled aluminium" is defensible; "sustainable aluminium" is not.

"Green," "eco-friendly," "environmentally friendly"

Vague unsubstantiated claims. Regulator-flagged across jurisdictions.

Defensible alternative. Replace with specific claims about specific attributes (e.g., "30% recycled content" with the methodology disclosed).

"100% renewable energy"

Challenged when based on unbundled RECs without additionality. Increasingly scrutinised under SBTi and EU emerging guidance.

Defensible alternative. Specify the instrument types (PPAs, bundled RECs, unbundled RECs), the additionality story, and the location-based performance alongside.

Percentage claims

Challenged when scope, base year, and methodology aren't specified. Examples: "30% reduction in emissions" without saying what scope, what base year, what calculation method.

Defensible alternative. Always state the specific scope, the base year, and the methodology. "Scope 1+2 absolute emissions reduced 30% from a 2020 baseline, calculated under the GHG Protocol Corporate Standard with operational control consolidation."

Comparative claims

"More sustainable than competitors" — challenged when the comparison basis isn't clear.

Defensible alternative. Avoid comparative claims unless you have substantiation methodology that's been independently verified.

What makes a claim defensible

The defensibility framework. Apply each test before publishing.

1. Specific scope. What exactly the claim covers (product, facility, company, value chain).
2. Substantiated by evidence. Measurement methodology that can be shared on request.
3. Time-bound. What time period the claim covers.
4. Methodology disclosed. How the number was calculated.
5. Limitations acknowledged. Where the claim doesn't extend, what's not included.
6. No absolutes without qualification. Almost no claim is "100%" or "fully" or "completely." If it is, the methodology must be airtight.
7. Independent assurance where significant. Third-party verification carries weight when claims are commercially important.

How to communicate sustainability progress without greenwashing

Practical guidance for marketing, communications, and sustainability teams:

• Lead with specifics, not adjectives. Numbers and scope before language.
• Disclose methodology alongside the claim. Inline or via a clear link to the methodology document.
• Include limitations openly. Acknowledging limits builds credibility, doesn't undermine it.
• Avoid forward-looking achievement language. "Will be net zero by 2030" is a target, not an achievement. Frame targets as commitments.
• Connect claims to your sustainability report. If it's not in the report, don't claim it in marketing. Marketing claims should never exceed the substantiation in the formal disclosures.
• Use third-party verification where the claim is significant. Particularly for emissions, energy, and product environmental claims.
• Train marketing and sales teams on the line between substantiated and unsubstantiated claims. Most greenwashing originates in copy decisions made by people who don't see the supporting data.

Common pitfalls

• Letting marketing copy run ahead of the data. The most common error. Copy is written before the substantiation exists, on the assumption that someone else will check the math.
• Claiming "carbon neutral" company-wide based on offset purchases. Increasingly challenged under EU rules.
• Using percentage claims without specifying scope and base year. "We reduced emissions by 30%" is meaningless without the qualifying details.
• Making forward-looking commitments and then quietly missing them. Under securities law (in some jurisdictions) and consumer protection regimes, missed commitments can carry legal exposure.
• Treating green imagery and visuals as "free." Visuals imply specific claims. A leaf icon on a product implies environmental superiority that may not exist.
• Repeating competitor claims as benchmarks without verification. The competitor's claim may itself be challengeable.
• Building sustainability claims into product packaging without third-party verification. Packaging claims are particularly prominent and particularly enforced.

When sustainability disclosure protects you from greenwashing claims

Rigorous sustainability reporting under GRI, IFRS, or ESRS is the best defence against greenwashing challenges. The mandatory disclosures provide the substantiation framework.

The discipline works in three ways:

• Marketing claims aligned to disclosed data are defensible. The methodology that survives an assurance review is the methodology that survives a regulator review.
• Claims that diverge from disclosed performance are flag-worthy. Regulators increasingly cross-reference marketing language against formal disclosures.
• Internal governance discipline prevents claim drift. When marketing teams know they have to align with the sustainability report, they ask the questions that prevent overclaiming.

This is also where sustainability platforms add commercial value beyond compliance. Platforms that maintain methodology documentation, audit trails, and third-party-aligned data sources make defensible claims structurally easier.

Where to go from here

• The most common sustainability reporting mistakes (and how to avoid them) — common errors that often produce greenwashing exposure.
• Building a materiality assessment from scratch — claims should align with material topics.
• Reporting under CSRD — CSRD as protection.
• Setting science-based targets: the SBTi process — credible target-setting.
• Calculating Scope 3 emissions — defensible Scope 3 disclosure prevents over-claiming.
• The framework deep pages.

If you're reviewing your current public claims for greenwashing exposure, run each through the seven-criteria defensibility framework. Claims that fail any test should be revised before they're challenged.