Three examples of greenwashing and how to avoid it

Consumer trust in sustainability claims is historically low. Stories of greenwashing and false marketing further damage consumer trust. It is therefore important that you, as a company, are in control of your communication and marketing to your customers to avoid being accused of greenwashing.

What is greenwashing?

Greenwashing refers to the practice of companies, either consciously or unconsciously, exaggerating or misrepresenting their environmental efforts to appear more sustainable than they really are. It can range from superficial advertising campaigns to fake environmental certifications. As a consumer, it can be difficult to distinguish which initiatives companies undertake that are truly sustainable. Especially if the company has invented their own certifications.

Three greenwashing examples

Danish Crown

In March 2024, Danish Crown was convicted in the High Court for misleading consumers with their "Climate Controlled Pig" campaign. What was called Denmark's first climate court case ended with the slaughterhouse being convicted of false marketing. It could not be documented that the pigs from the farms in Danish Crown's 'climate program' were kept separate from other farms that the slaughterhouse worked with. In addition, it was not possible to say whether consumers had bought pork from the farms included in the climate program.

Arla

Arla was convicted in Sweden in 2023 for misleading consumers. The dairy had run a campaign promising 'Net zero climate footprint'.

"Consumers do not understand that the company's promise of net-zero carbon footprint is based on activities that will only be able to compensate for the carbon footprint of milk production in 100 years." the court justifies its judgment.

The dairy ran a similar campaign in Denmark, which was highly criticized by several experts. Expert criticism was all it amounted to in Denmark when the campaign was removed after the Swedish verdict.

Zalando

Online retailer Zalando has claimed to be sustainable for many years. They have done this with their own, invented certifications that have characterized their website. After investigations by authorities in Denmark, Norway, Sweden, Germany and the EU, Zalando received a warning and subsequently removed the symbols from their website at no additional cost to them.

Three takeaways from the greenwashing examples

1. Have documentation in order and keep your promises.
2. Avoid using terms like "carbon neutral" and "net-zero carbon footprint" when buying carbon credits.
3. Don't invent your own labels and certifications. Always get an independent third party to certify your claims.

Legislation, fines and penalties

Complaints are growing and consumer confidence in climate claims is declining

With the growing awareness of greenwashing, the number of complaints from consumers and organizations has also grown. In 2019, 16 companies were reported to the Consumer Ombudsman for greenwashing. In just four years, the number has increased ninefold, with 146 greenwashing cases in 2023:

"There is a tendency for consumers to no longer value green marketing because they think it's greenwashing. It's hard to change a bad first impression, and many have already experienced the disappointment of buying a product that was supposed to support the green transition but turned out to be hot air."

- Marie Frank-Nielsen, The Danish Consumer Council Think

At the same time, a new study shows that consumer trust in climate claims has dropped significantly in just two years:

EU Green Claims Directive

The EU's new Green Claims Directive aims to regulate companies' communication of environmental claims and sustainability initiatives to combat greenwashing and keep consumers safe.

"The EU suggests that you cannot make explicit environmental claims or eco-labeling schemes if you have not had a third party approve your documentation beforehand."

- Vagn Jelsøe, Chief Consultant for Sustainable Consumption, The Danish Consumer Council Tænk

Main points of the directive:

• Clarity and transparency: Green claims must be clear, precise and supportable with factual data.
• Prohibition of misleading claims: It is prohibited to provide misleading information or use general terms like "green" without clear definitions.
• Harmonization of rules: The directive creates uniform standards for green claims across the EU to avoid unfair competition.
• Enforcement and penalties: Member States must enforce the directive with appropriate sanctions, including fines, for violations.
• Consumer protection: Focus on protecting consumers from misleading advertising and building trust in green claims.

Fines and penalties

In the eyes of the court, there is no such thing as 'greenwashing'. Accusations will therefore fall under misleading marketing. Misleading marketing can lead to fines, disputes and lawsuits. It usually involves the Consumer Ombudsman reporting a company to the police. This is followed by a criminal case where the decision, and a possible fine, is made by a court. In civil law, there has been an increase in disputes and lawsuits concerning companies' incorrect or incomplete documentation on environmental and climate impact.

How to avoid accusations of greenwashing

Stay on top of your data

Make sure you have your carbon accounting and environmental data in order before you start communicating about sustainable initiatives. Document your baseline first and work towards reducing it over time through realistic and concrete actions. This means you can compare yourself to your baseline year on year and showcase it in your annual carbon or ESG report.

Use best practices and certifications

You may want to have your accounts audited by a chartered accountant or other independent verification entity, which supports the validity of your claims. Never invent your own standard, label or certification to communicate sustainability. Always have an independent certification body validate your data. And finally, make sure you use the recognized methods and databases for carbon accounting. Read our complete guide to carbon accounting.

"Our customers find that consumers are demanding more details and more valid documentation when marketing themselves as environmentally or climate friendly. Consumers have become more conscious in the buying situation, and those who are not factual and concrete today actually risk selling fewer products. So there is a lot of pressure to communicate."

- Maria Søndergaard, Director of Production and Retail, Capgemini Denmark

Development and follow-up

Make sure to continuously follow up on your ESG and carbon data and be honest and concrete about your progress with stakeholders. It shows your consistent commitment to making your business more sustainable.

Avoid calling your products or services carbon neutral - even if you have purchased carbon offsets. It's almost impossible to become 100% carbon neutral and you can't do it by buying carbon credits, although it can be a good idea to incorporate into your sustainability strategy.

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