The events of New York Climate Week and COP30 have placed the sustainability agenda firmly in the spotlight – highlighting a range of climate-related issues and the important role that businesses and wider stakeholders can play. But alongside the opportunities to embrace ESG trends and be part of that positive movement, there comes accountability and the need for businesses to develop sustainable strategies founded on strong governance.

From a marketing and brand perspective, sustainability and 'green' claims have come under increasing scrutiny. Stakeholders such as investors and consumers are becoming increasingly engaged in environmental issues and more discerning, quickly recognising false promises and superficial eco-friendly messaging. And under a more complex regulatory environment, the impact of getting things wrong under current laws and frameworks, no matter where you operate, is significant – with legal, financial and reputational consequences.

In this article, we explore what is greenwashing, some of the key risk areas to consider and the importance of putting green claims in the context of your wider business. Focusing on what effective risk management looks like, we share some best practices for good governance and authentic sustainability marketing.

What is greenwashing and what are the common risk areas?

Greenwashing is the term used to describe where misleading or exaggerated claims are made about an organisation's green initiatives. Understanding the regulatory environment and having robust governance around how your organisation reports on its overall ESG practices and communicates its green claims is crucial. Where issues arise, a common factor can be lack of clarity and context around the messages being conveyed through sustainability reporting and so-called 'green' marketing.

In many cases, greenwashing is not intentional, but rather the result of vague language, insufficient evidence, or a failure to qualify claims. Regardless of intent, greenwashing erodes consumer trust and can damage reputations. As scrutiny over businesses' ESG-related activities, impacts and communication messages intensifies, brands must ensure their sustainability communications are precise, transparent, and backed by robust evidence – avoiding both exaggeration and omission. Some of the common patterns of greenwashing include:

  • Using unclear, vague language such as "eco-friendly", "green" or "sustainable".
  • Making "carbon neutral" claims, without having the necessary life-cycle assessments in place or without detailing the basis of those claims - for example details of offsets and other data, scope or methodology.
  • The use of unsupportable, absolute claims, such as '100% sustainable' or 'zero impact'.
  • Highlighting a minor green initiative, or cherry picking positive data, while ignoring less positive impacts or non-sustainable approaches, meaning stakeholders don't see the full picture.
  • Being over enthusiastic when summarising the environmental benefits of a product or service, giving an impression of performance which cannot be substantiated.
  • Using aspirational language without current action and concrete plans with verifiable milestones.
  • Omitting negative environmental impacts, which present a skewed image of current environmental performance.

There are many pitfalls for businesses to be aware of when they report on their ESG initiatives and communicate green claims to stakeholders. Marketing claims relating to sustainability are being observed ever more closely worldwide. The UK's Advertising Standards Authority (ASA), for example, has become increasingly proactive, adopting artificial intelligence (AI) tools to identify questionable environmental claims in digital media. There is a requirement for transparency and substantiation and businesses must, therefore, ensure their claims reflect reality and are supported by comprehensive evidence.

Without careful consideration of the language used, there can be serious consequences, ranging from enforcement, consumer complaints, to class-style actions and internal and reputational costs. Under the UK's Digital Markets Competition and Consumers Act (DMCCA) 2024, for example, the Competition and Markets Authority (CMA) has new powers to fine businesses up to 10% of global turnover for unfair commercial practices including misleading claims.

For some organisations, the desire to avoid misleading or miscommunicating can lead to a strategy of disclosing little about the organisation's activities in this space, or even staying silent – sometimes described as 'greenhushing'. However, this too can carry risk, as a failure to be transparent about environmental performance may lead to stakeholder dissatisfaction and competitive disadvantage.

How to address greenwashing risks?

One of the best ways to protect against greenwashing is through transparency and ensuring what you say is supported by what you do and is properly substantiated with evidence. It's also important that your ESG initiatives and green claims are placed in the context of the wider business, so that consumers can understand the whole picture.

Keeping abreast of the evolving regulatory environment that governs how companies communicate their ESG credentials is crucial – especially in industries where sustainability marketing is more prevalent. This may include a combination of specific 'green' instruments and more general legal requirements around misleading marketing and unfair commercial practices. In the UK, for example, alongside the DMCCA 2024, relevant regulation and guidance includes the Green Claims Code developed by the CMA, the Business Protection from Misleading Marketing Regulations 2008, the Financial Conduct Authority's 'anti-greenwashing' rule, and the CAP and BCAP codes, administered by the ASA – to name but a few.

Of course, the relevant laws will differ by jurisdiction, as will the enforcement risk. The EU and many other international markets are taking steps to address the risk of 'greenwashing', but they are moving at different speeds, and there may even be some retrenchment in markets such as the US. This presents additional complexity for businesses operating globally. But, in determining their pre-publication review and clearance strategy, businesses also need to be aware that claims made in one market can 'bleed' into others, especially where digital media is concerned, and that greenwashing in one market can negatively impact reputation worldwide.

Navigating these complexities can be challenging, as businesses seek to balance conveying important messages to their stakeholders with the risk of going too far and misdescribing ESG benefits and claims. Having robust governance in place to oversee your activities in this area is crucial. Often, the best examples of compliance and effectiveness come from businesses where sustainability is put at the heart of decision making and built directly into strategy.

Our 'Greenwashing Guide for UK businesses' explores some of the key considerations for businesses in protecting themselves from greenwashing risk. It discusses the importance of transparent reporting, drawing on standardised frameworks, and accountability for ESG practices, which helps support good governance and build trust with stakeholders. Other areas covered are risk mitigation through staying on top of greenwashing regulations and the decisions regulators are making, incorporating ESG goals into long-term strategy and being authentic in addressing stakeholder expectations in this area.

At an organisational level, there may be different levels of understanding and expertise in relation to regulations surrounding advertising and greenwashing. Providing ESG training to leaders and employees will help to ensure they are well-equipped to recognise and manage any potential gaps or areas of risk identified.

What is best practice for 'green' marketing?

In addition to the reporting and disclosing of ESG practices and the communication of corporate messages, the use of sustainability claims in marketing deserves specific consideration. For some companies, particularly those in sectors such as consumer goods, aviation, energy, food and beverage etc, marketing activities have seen an increased focus on green and sustainable claims. But taking the factors discussed above into account and seeking to learn from real-world experiences to date, what might best practice entail?

Drawing out some of the top tips from our Greenwashing Guide, a few key themes on how to avoid greenwashing are:

  • Evaluate your organisation's impact and ESG goals

    Take a step back to really understand your organisation's ESG impact and goals. Are these goals aligned with the company's strategy and reflected across the business' operations and supply chain? Have you reviewed your ESG claims through both the lens of current regulation and with best practice in mind?

  • Authenticity and transparency

    Be honest about where you are on your sustainability journey and the ESG benefits your products/services bring. Alongside meeting regulatory requirements, there are frameworks and guidance to help companies build a robust approach. Consumers and wider stakeholders value transparency, and to avoid greenwashing risk and ensure authenticity it's important that any claims for a particular product or aspect of operations do not misrepresent the wider business.

  • Substantiation-first processes

    Ensure all your sustainability claims are accurate, substantiated and clear; and provide greater context to tell the whole story. Build evidence packs before publicly making a green claim: for example, data sources, life cycle assessment/carbon footprint data, boundary definitions, assumptions, plus an internal green‑claims checklist aligned to the relevant rules.

  • Fair and balanced presentation

    Use clear, precise language to communicate your sustainability efforts in a way that reflects the evidence you hold. Avoid cherry picking and include material context and limitations. Environmental claims need to be qualified with specifics like percentage reductions and timeframes. And, as highlighted above, vague, unsupportable terms such as 'eco-friendly' should be avoided – instead, describe specific actions, benefits and results.

  • Strategic integration

    Embed sustainability into brand identity, product development and customer experience – so it's part of your organisation's DNA. Some questions to consider: How does sustainability sit within the business' wider strategy? What are the organisation's emissions/impacts? How do you engage with suppliers to promote sustainability throughout the supply chain? Are the four Ps of Product, Price, Place and Promotion in your marketing aligned with sustainability goals?

  • Joined up governance and controls

    Ensure the board of directors understands ESG risks and opportunities and that there is an internal committee or individual responsible for ESG oversight. This will aid co-ordination and alignment behind specific goals and help to integrate sustainability into the business. Processes such as establishing multi-departmental sign offs throughout, with accountabilities mapped for ESG claims and disclosures, will also help to keep reporting and marketing aligned.

  • Stakeholder engagement

    Educate and engage with stakeholders to help better inform them about your green efforts and sustainable practices. Understanding their concerns and expectations will better inform company strategy and marketing, as well as help create positive impacts that benefit everyone.

  • Training and awareness

    Putting processes in place to ensure internal teams are engaged and well informed in this area will support the production of compliant, responsible and effective messaging. While this is relevant across an organisation, targeted training for marketers and spokespeople is crucial to ensure a unified message with clear facts and information and the best method of delivery.

  • Audit and continuous improvement

    Embrace technology to evaluate environmental impacts and aid specific and transparent reporting. Put processes in place to periodically audit claims across channels, correcting and withdrawing when and where evidence changes. It's also important to ensure that emerging rules are considered and templates are kept current. Businesses should seek legal counsel where there may be potential gaps or issues and to ensure compliance as the regulatory landscape evolves.

Focusing on consumer benefits first

Building on the theme of authenticity, sustainability marketing done well will also see a focus on consumer benefits, supported by evidence and aligned with a company's ESG goals. The marketing industry refers to the challenge of overcoming the so-called “value-action gap” – the disconnect between what consumers say they value and the actions they actually take. However, this gap can often be less about consumer morality and more about the practical and psychological barriers – such as eco guilt, trust, social norms and limited availability – that stand in the way of sustainable choices.

Consumers are looking to companies and brands to convey specific, tangible benefits about their sustainable products and services. With increasing consumer interest in making choices that are better for the environment, there is the opportunity to use ESG benefits to translate interest into action. This focus on benefits to the consumer and well-evidenced ESG claims can provide a win for business and the environment while also ensuring companies avoid the pitfalls of greenwashing.

Where might you need support to protect from greenwashing risks?

Pushing forward with green initiatives and green communications while keeping on the right side of the law may seem daunting. But staying silent brings with it a different set of risks and can undermine trust and stakeholder relationships. With interest in sustainability not about to wane, it's important that businesses keep on top of the legal developments, put the right governance and policies in place, and continually adapt and monitor for improvement.

Whatever sector or jurisdiction you operate in, our international ESG team has the skills and experience to advise on the full breadth of legal issues relating to ESG. The team is working with a broad range of businesses to help them understand their responsibilities, assess their sustainability strategy and supply chains and manage potential areas of risk and opportunity. Our specialists in advertising law have worked with both UK and international companies across many sectors to support them in protecting their brands from greenwashing risk. Their strong reputation in the field is recognised with a top ranking in Legal 500 UK 2025 for 'Media: Advertising and Marketing'.

Reach out to the team to see where they can support and see our greenwashing topic page for more insights into how to avoid making misleading sustainability claims. You'll also be able to download from there a copy of our Greenwashing Guide, which includes a 10-point checklist to help organisations avoid key risks and to embrace sustainability.