Greenwashing can cause serious reputational and financial harm to your business – but what is it, and how do you avoid it?
Greenwashing is a special kind of bullshit. The phrase was coined in the 1980s to describe misleading claims about the environmental benefits of some product, service or business practice. In 2025, companies found guilty of greenwashing could be fined a tenth of their turnover.
There’s long been a reputational risk to greenwashing – there’s a lot of organisations and individuals out there who love to point out the failings of companies which make grand claims but don’t walk the talk.
Increasingly, greenwashing can cause serious financial damage to your business. From April, UK companies making misleading claims about the environmental performance can face significant penalties from the competition authorities.
The Digital Markets, Competition and Consumers (DMCC) Act allows fines of up to 10 per cent of global turnover for breaking consumer protection laws, including misleading environmental claims. While the maximum penalty is likely to be applied only in the most egregious cases, it’s more important than ever to understand what good practice looks like.
What is greenwashing?
There’s no legal definition of greenwashing, but for marketing communications it essentially means claims about environmental sustainability which aren’t themselves sustainable – as in, they can’t stand up to scrutiny.
That might be a claim that something has a positive or neutral effect on the environment (which includes the use of terms like “green” or “eco-friendly”), or that it’s less harmful than previous products or your competitors’ alternatives.
There are obvious marketing benefits in making such claims, and an ever-growing number of companies who can honestly say that their products are sustainable.
But if your claims don’t meet reality, you are greenwashing. You might be greenwashing even if you’re not deliberately intending to mislead your audience. If that’s the case, you’re probably still guilty of not understanding the rules or, arguably worse, the exact nature of whatever it is that you’re selling.
Avoiding greenwashing is particularly important if you’re selling products which are intended to help customers reduce their emissions or environmental impacts. Even if it doesn’t lead to legal action, a failure to demonstrate best practice can very quickly destroy your reputation and customer relationships.
Accusations of greenwashing also abound in other areas of public relations, when a polluting company showcases some relatively minor green activity. Think of an oil company sponsoring a garden festival, or an airline boasting of its token use of synthetic fuel. That’s a topic for another time.
How do you avoid greenwashing?
The UK’s Competitions and Marketing Authority (CMA) introduced its Green Claims Code in 2021 as a guide for businesses making environmental claims about their products or services. The CMA is responsible for policing greenwashing in marketing content, and the code is well worth a careful read by anyone working in this space.
Some of it is standard advice for good marketing: be truthful, accurate, clear and unambiguous; don’t omit or hide important information; only make fair and accurate comparisons to alternative products. Don’t bullshit, in short.
There are extra requirements for green claims. The big one is to consider the full lifespan and total impact of a product. Your gizmo might have zero emissions in use, but what are the environmental impacts of its production? Will its use increase emissions or harm elsewhere? Will recycling or disposal cause problems at the end of its life? What about its packaging and consumables?
To be fully transparent, you will need to consider the emissions and impacts of your supply chain both upstream (the companies you buy from, and the companies they buy from, all the way back to raw materials) and downstream (the buyers and users of your product throughout its lifetime, though to disposal). Manufacturers in the supply chain for highly polluting industries such as aviation or fossil fuels will face particular scrutiny on their downsteam impacts.
In all cases, you need to make sure that you can back up all your claims with robust, credible and up-to-date evidence. In a lot of cases, it won’t be practical to include such evidence in an advert or product listing, but you should have it all available on your website.
As well as the general laws on consumer protection and trading standards, you may also need to comply with rules which are specific to your sector or product. In financial services, for example, the Financial Conduct Authority last year introduced the strict Anti-Greenwashing Rule. Companies making misleading claims about the sustainability credentials of their investments can be fined up to five per cent of UK revenue.
The CMA and other authorities are actively monitoring for misleading claims, and using new AI tools to scan online content to flag possible misbehaviour. You can be investigated for greenwashing even if no one has complained.
What is best practice to avoid greenwashing?
Avoiding greenwashing is essential for any business. For companies working with low-carbon technologies or selling on their sustainability credentials, it can be worth going that extra mile to really demonstrate your commitment.
Companies used to dealing with ISO standards should look at ISO 14020:2022, which describes principles and general requirements for product-related environmental statements. ISO 14024:2018 covers claims covered by third-party certification, in markets such as electronics, textiles and food products. ISO 14021:2016 covers other self-declared claims, and covers similar ground to the CMA code. Formal compliance can be a valuable selling point for quality-minded customers.
The Anti-Greenwash Charter is a new initiative to support organisations which are committed to responsible sustainability communications. It offers a review of existing marketing material, anti-greenwash training, and help to craft a bespoke green claims policy. Companies can then be awarded signatory status, with ongoing monitoring and support. Initial signatories come mostly from the construction and built environment sector, but the charter could be used across many other industries.
And, of course, it’s vital that you don’t slip up in any of your external communications and channels – including your website content, press releases, marketing material and social posts.
Your communications and marketing team – whether in-house or outsourced – need to understand the rules about greenwashing, and be familiar with all the different issues that need to be considered for your market. In many cases, that means getting into the details and data on exactly what your product does or doesn’t do.
At Othersfield, we don’t greenwash and we don’t bullshit. We do have a good broad understanding of sustainability issues, and we’re not afraid to dig into the data. Get in touch to find out how we could help you.