What is greenwashing - and how do you spot it?
Greenwashing — making environmental claims that are misleading, unsubstantiated or simply false — has become one of the most regulated areas of sustainability. This guide explains what it is, where the legal risk now sits, and what businesses need to do to stay the right side of the line.
Greenwashing — making environmental claims that are misleading, unsubstantiated or simply false — has become one of the most regulated areas of sustainability. This guide explains what it is, where the legal risk now sits, and what businesses need to do to stay the right side of the line.
What is greenwashing?
Greenwashing occurs when an organisation makes environmental claims that create a false or misleading impression of its sustainability credentials. It ranges from deliberate deception to well-intentioned claims that turn out not to hold up to scrutiny.
Common forms include: vague claims ("eco-friendly," "sustainable," "green") without substantiation; cherry-picking one positive attribute while ignoring significant negatives; claims based on a single life cycle stage that ignore the full picture; misleading use of imagery (green colours, natural imagery) that implies environmental credentials the product does not have; and false or unverified certifications.
A note on intent
Greenwashing does not require intent to deceive. Regulators in both the UK and EU assess claims on their effect on consumers, not the intentions of the company making them. A genuinely well-meaning claim that misleads is still a problem under current and forthcoming rules.
The regulatory landscape in 2026
The legal risk around greenwashing has increased substantially in the last three years. Two major regulatory frameworks now shape what UK and EU businesses can claim.
UK Competition and Markets Authority (CMA) — Green Claims Code. The CMA's Green Claims Code, updated in 2021, sets out six principles: claims must be truthful and accurate, clear and unambiguous, not omit or hide relevant information, compare on a fair and meaningful basis, consider the full life cycle of the product, and be substantiated. The CMA has since carried out investigations into fashion, FMCG, and financial services — and has the power to take enforcement action or refer cases to the courts.
EU Green Claims Directive. Adopted in 2024, the EU Green Claims Directive goes further than the CMA Code. It requires that any explicit environmental claim used in marketing must be: substantiated by a life cycle assessment or equivalent scientific methodology, verified by an accredited third party, and registered on a forthcoming EU claims register before use. Claims that rely on carbon offsets to assert environmental neutrality ("carbon neutral delivery," "climate neutral product") are specifically addressed — companies must disclose that they use offsets and be transparent about their nature.
High-risk claim types
| Claim type | Risk level | Why |
|---|---|---|
| "Carbon neutral" product or service | High | Requires substantiated LCA and credible offset methodology; EU directive requires transparent disclosure of offset use |
| "Sustainable" without qualification | High | Too vague to be substantiated; CMA Code explicitly flags this as a problematic claim type |
| "Eco-friendly" or "green" | High | Vague comparative claims without a specified benchmark or scope are unsubstantiable |
| "Made from recycled materials" | Medium | Generally acceptable if accurate and the percentage is disclosed; misleading if used to imply broader sustainability |
| Third-party certification logos | Low-medium | Acceptable if genuine; risk arises if the scheme is not credible or the scope is misrepresented |
| "Net zero by 2040" | Medium-high | Acceptable if a credible, science-based transition plan exists; problematic if it is aspirational without a pathway |
Carbon offset claims: the highest-risk area
Claims of carbon or climate neutrality based on offset purchases are currently under the most scrutiny. The EU Green Claims Directive specifically requires that companies using offsets to support neutrality claims must: disclose the use of offsets explicitly, describe the offset standard used, state the vintage and project type, and acknowledge that offsets do not constitute zero emissions.
In practice, this means that "carbon neutral delivery" or "net zero product" claims made purely on the basis of credit purchases — without underlying emission reductions — are likely to be treated as misleading under EU rules and potentially under CMA Code principles in the UK.
How to protect your business
The practical steps are not complicated, but they require discipline:
Be specific about scope. "Our packaging is made from 80% recycled materials" is substantiable. "Our packaging is sustainable" is not. Every environmental claim should have a defined scope, methodology, and evidence base.
Get third-party verification for material claims. Independent verification — from a credible accreditation body, not a self-certification scheme — provides both legal protection and credibility with customers and investors.
Keep evidence on file. The CMA Code requires that businesses hold the evidence to support their claims before making them, not after. If a claim cannot be substantiated from existing evidence, it should not be made.
Audit claims before the EU directive takes effect. UK businesses selling into EU markets or operating EU subsidiaries need to audit their marketing claims against the Green Claims Directive before it is fully implemented. Non-compliance will be an enforcement matter, not a civil matter.
Key takeaway
Greenwashing risk is no longer reputational only — it is increasingly a legal risk under the CMA Green Claims Code and the EU Green Claims Directive. Claims must be specific, substantiated, and verifiable. Vague terms like "eco-friendly" and "sustainable" without qualification are problematic. Carbon neutrality claims based solely on offset purchases require transparent disclosure of the offset methodology and are under specific regulatory scrutiny.