How to Spot—and Stop—Greenwashing

What Constitutes Greenwashing?

From a legal perspective, greenwashing falls under the umbrella of misleading advertising, which is covered by consumer protection laws in the E.U., U.K., and other countries around the world. While countries have varying legal definitions for misleading advertising, it can be broadly defined as advertising that is either factually incorrect or otherwise deceives the consumer, and is liable to influence the consumer’s behavior, explained Clemens Kaupa, assistant professor in the Faculty of Law at Vrije University in Amsterdam.

Greenwashing isn’t a new strategy. In the mid-1980s, the “People Do” ad campaign showed Chevron employees protecting wildlife. It diverted attention from the company’s environmental impact and misled the public by portraying Chevron as caring for the environment. The series of ads are considered an infamous and early example of Big Oil’s greenwashing.

Today, the same tactics are still in use. Over an uplifting music soundtrack, an advertisement by Shell shows images of beautiful forests and natural landscapes and says that the company is “harnessing nature” and “supports reforestation projects.” This is despite the fact that, according to ClientEarth, the company’s offsetting projects account for less than one-tenth of its emissions.

“If you are a fossil fuel company or a similarly highly polluting industry, you’re going to struggle to make a sustainability advert that complies with the law and regulation.”

Another ad by TotalEnergies makes claims that the company is “storing carbon” in “natural carbon sinks” and also shows trees, plants, and other natural elements. Again, the claims amount to greenwashing, says ClientEarth, because the company’s planned expenditure on these projects is only 2% of its $16 billion budget.

Greenwashing isn’t only about lies or visual cues. Like in the Shell and TotalEnergies ads referenced above, a misleading claim may be true but still deceptive.

“It’s true that Exxon spent a few hundred million on having an algae biofuel research project, but what they omitted to mention [in their ads] was the relevance of this set against their business and what else they were doing,” White explained. “It’s both true and misleading and, fundamentally, advertising tends to work through that sort of misdirection a lot of the time.”

Companies also misdirect by making offsetting claims, such as pledges to plant trees or carbon capture and storage projects. Recently, a court in Sweden banned European dairy major Arla Foods from using the term “net-zero climate footprint” in the marketing of its products on the grounds that it was misleading.

“I consider this a clarification from a court that offsetting claims are unlawful,” said White.

Greenwashing may also hinge on association. For instance, as Kaupa explained in a 2021 paper published in the Journal of European Consumer and Market Law, the phrase “cleaner burning” is incessantly linked to gas, thereby promoting the false connection between “gas” and “clean.”

This tactic of greenwashing-by-association harkens back to the 1940s and ’50s tobacco industry ad campaign that proclaimed that “more doctors smoke Camels than any other cigarette.” It not only aimed to establish an “associative link” between cigarette smoking and the doctor as a scientific and social authority, Kaupa argues in his paper, but also of normalizing tobacco ads and, in turn, smoking as a healthy practice.

This goes for communication by fossil fuel and other carbon-intensive companies as well. Greenwashing has the aim of “normalizing harmful commodities,” Kaupa writes.

But the issue is intrinsic: Experts argue that polluting industries cannot advertise the positive environmental impacts of their activities without it being inherently misleading. This means that all sustainability communication by fossil fuel companies, to name one industry, is unlawful, White said.

“If you are a fossil fuel company or a similarly highly polluting industry, you’re going to struggle to make a sustainability advert that complies with the law and regulation. And the reason for that is that you have to start substantiating that claim against the environmental evidence, but the environmental evidence is damning,” he said. “You’ve got an inherent tension, and previously this tension has been dealt with by companies basically just knowing that they won’t face any accountability.”

The Effects of Greenwashing on the Public 

One reason companies are often able to get away with greenwashing is a concept called “information asymmetry.” In short, they have more information about products or their operations than the average consumer does, and can use that information to their advantage.

“A company deals with its own products all the time. They have good knowledge about their products and about the potential effects, for example, on the environment,” Kaupa said. “In contrast, consumers have to make many consumption choices every day. They also have limited time and resources and can therefore not be as well informed about each product and each service as the corporation that sells it can.”

Informational asymmetry not only makes it easier for companies to greenwash, it also makes it more important to push back when they do. The idea that it would be up to consumers “to weed out unsustainable products” through their own choices is “completely unrealistic,” Kaupa added.

Trust is declining to the point that “people aren’t [even] going to believe the good stuff.”

If consumers have little knowledge of environmental issues, they can be even more vulnerable to deception. A 2015 study published in the International Journal of Advertising found that ads using imagery associated with nature, such as beautiful landscapes, plants, or trees, misled consumers and altered their perception of the brand’s “ecological image,” a strategy called “executional greenwashing.” Similarly to the 2023 study—which found that countering greenwashing with facts didn’t totally reverse the impact—the 2015 study also concluded that figures about the company’s negative environmental performance weren’t sufficient to help non-expert consumers correct this deception.

White argues that another concerning consequence of strategic greenwashing by polluting industries is the public’s loss of trust toward producers’ claims and behavior. Trust is declining to the point that “people aren’t [even] going to believe the good stuff,” he said.

According to a study published in March 2023, more research is needed into consumer trust and other consumer “attitudes” towards corporate greenwashing. The study also proposes further research into the effects of greenwashing on other stakeholders, including company employees and suppliers, as well as measuring different types of greenwashing activities.

Greenwashing’s Ripple Effects

Not all greenwashing claims are consumer-facing. Last September in Australia, the Environmental Defenders Office, on behalf of The Plains Clan of the Wonnarua People (PCWP) and Lock the Gate Alliance, filed a complaint against coal giant Glencore for allegedly misleading investors, as well as the public, over its net-zero claims and climate strategy.

Companies can engage in greenwashing in their internal communications too, such as to shareholders through corporate reporting, financial accounts, and website pages for investors. Both White and Kaupa agree that laws protecting consumers and shareholders from greenwashing claims for the most part already exist, and they all function in a similar way, White says.

“These laws require that any kind of claim made in commercial communication be backed up by the evidence. So when you are making an environmental claim about your product, or your business, or even the world, then that environmental claim needs to be consistent with the environmental evidence. It’s not enough to point to market practice or what your peers are doing as a business,” said White.

The idea of pushing gas as a clean energy source crucial to the energy transition amounts to greenwashing, experts say, and results in gas lock-in.

Messaging used in public advertising and shareholder communication is also seen in lobbying, White explained, which means that greenwashing has the potential to seep through policy-making contexts and directly or indirectly influence legislation.

Shell, ExxonMobil, BP, and TotalEnergies, for example, all lobbied the European Union to promote fossil gas’s inclusion in policies designed for the energy transition, instead of advocating for renewables and electrification, according to a report by independent think tank InfluenceMap. The idea of pushing gas as a clean energy source crucial to the energy transition amounts to greenwashing, experts say, and results in gas lock-in.

Although sustainability communication is regulated by law, there is a structural enforcement gap which is just now starting to be addressed through greenwashing litigation.

“A lot of these claims were initially being brought by concerned citizens to regulators or by NGOs to regulators and courts. But increasingly it’s becoming a general dispute area because you have competitors bringing claims, you have class action claims, which are really claims in order to recoup damages for wronged consumers, and we also see governments just generally looking to overhaul the rules,” White explained, adding that as this process develops, the enforcement gap is gradually closing.

Progress in greenwashing litigation is crucial because cases can have a “big deterrent effect” and “send a signal” to people and companies but, according to White, it’s necessary to also move beyond greenwashing litigation.

“We need a more complete policy solution, something like a prohibition on fossil fuel advertising,” he said. “It’s absurd that we want to decarbonize but still have fossil fuel producers advertising all over the place.”