By Sammy Marks, US Environmental Policy Student
Imagine walking down the egg aisle at your local grocery store. You are greeted by cartons depicting lush green pastures, happy hens roaming a spacious farm, and buzzwords like “eco-friendly” or “sustainably sourced.” Being an environmentally conscious consumer, you make the ethical choice and pay the extra couple of dollars—after all, you’re supporting the environment, right? Well, in reality, it turns out that those “sustainable eggs” came from the same industrial farm as the cheaper ones, and you’ve just given more money to one of America’s leading greenhouse gas emitters.
Congrats, you are now a victim of corporate greenwashing!
According to the Green Business Bureau, greenwashing is the “the exaggeration of a company’s environmental credentials.”[1] Knowing consumers are willing to pay 9.7% more for sustainable goods, brands can use greenwashing to increase profit margins without fundamentally changing their business models.[2] In turn, as seen in Europe, 42% of green claims by businesses are deceptive or false.[3] Environmental policies must adapt to this sophisticated public relations tool as it subjects millions of consumers to unfair market conditions where they pay more for products they can’t even trust.
The growing demand for eco-friendly products comes from a desire to mitigate environmental impacts. For 85% of conscious consumers, the shift toward sustainability-focused products is due to first hand exposure to climate change.[4] Additionally, over 40% of all consumers consider water pollution and plastic waste before buying a product.[5] In theory, this momentum should lead to environmental progress, but in reality, companies use clever moldings of the truth to avoid taking genuine action. To paint a better picture, here are some common examples of greenwashing:
- Misleading imagery: In 2009, McDonald’s made its European logo green to demonstrate eco-friendliness despite accounting for 29% of the UK’s take-out litter.[6] [7]
- Disguised trade-offs: In 2016, Huggies “Green and Natural” diapers were marketed as environmentally friendly because they used organic cotton, but they still contained petrochemical gels, of which petrochemicals account for over 10% of global greenhouse gas emissions.[8] [9]
- Fake Certifications: In 2008, 7% of non-food supermarket items in Australia were labeled “CFC-free,” despite the fact that CFCs were banned there in 1995.[10]
These examples illustrate how greenwashing erodes consumer trust and market fairness—making it a pressing policy issue. In the US, greenwashing is regulated by two key administrative agencies: the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC). Regarding the FTC, Section 5 of the FTC ACT prohibits unfair business practices that affect the buying and selling of goods. To help businesses promote eco-friendliness honestly, the FTC has issued “Green Guides” that outline broad principles related to marketing claims, including “how reasonable consumers likely interpret it; the basic elements necessary to substantiate it; and options for qualifications to avoid deception.”[11] The SEC has tried to slow down ESG greenwashing through the “Names Rule” that mandates 80% of a fund’s portfolio must be allocated specifically to the items in the portfolio name.[12] An example of the names rule in action is WisdomTree Asset Management, which got fined $4 million due to misleading ESG exchange-traded funds (ETFs).[13]
Although these regulations have good intentions, they aren’t working. The FTC Green Guides aren’t legally binding, meaning businesses can still market as they please, and they haven’t been updated since 2012, which has allowed companies to use legislative loopholes.[14] Similarly, the SEC’s ESG disclosure rules focus primarily on high finance, which doesn’t affect a lot of Americans day-in-day-out.
To regulate greenwashing well, the American government should make several policy changes. First, the FTC must make its Green Guides legally enforceable through fines for minor breaches and criminal prosecution for large-scale offenses. This can be done by using third-party verifications for environmental claims. The EU’s Green Claims Directive is a model the US could follow as it mandates companies to provide clear, scientific evidence for all claims.[15]
Second, Congress should enact a “Greenwashing Accountability Act” that brings together the currently disjointed policy environment in an all-encompassing legislation. This Act could criminalize greenwashing on a federal level, publicize a list of all companies caught greenwashing to inform consumers, and provide state attorneys general with the power to take legal action against violating corporations. These reforms are definitely harsher than current regulations, but shifting from voluntary guidelines to mandatory compliance is essential to get companies to cooperate.
As of now, there is no such bill being debated in Congress; however, recent developments at both the federal and state levels suggest one may be coming soon. Federally, the FTC recently announced it is seeking public comment on Green Guide updates which could give consumers a voice in how environmental marketing claims are regulated.[16] At the same time, the SEC has proposed the “Enhanced Disclosures by Investment Advisers and Companies Rule,” which would require funds to explain what specific ESG factors influence decisions and what the emissions of the portfolio are.[17] At the state level, California recently introduced the “Climate Corporate Accountability Act,” which requires large companies to publicly disclose verified Scope 1, 2, and 3 greenhouse gas emissions.[18] This policy could be a scalable blueprint for a future federal greenwashing law where companies have to back up their environmental claims with third-party-verified data. As of now, this is simply momentum brewing, and until legislation comes, choosing “green” products will remain merely a guessing game.
[1] “What Is Greenwashing? 5 Signs to Spot & Stop Greenwashing | Green Business Benchmark°.” Greenbusinessbenchmark.com. Last modified 2023. https://www.greenbusinessbenchmark.com/archive/5-ways-to-spot-greenwashing
[2] PwC. “Consumers Willing to Pay 9.7% Sustainability Premium, Even as Cost-of-Living and Inflationary Concerns Weigh: PwC 2024 Voice of the Consumer Survey.” PwC. Last modified May 15, 2024. https://www.pwc.com/gx/en/news-room/press-releases/2024/pwc-2024-voice-of-consumer-survey.html
[3] FSC. “What Is Greenwashing? Exposing Deceptive Tactics.” FSC. Last modified May 27, 2024. https://fsc.org/en/blog/what-is-greenwashing
[4] PwC. “Consumers Willing to Pay 9.7% Sustainability Premium, Even as Cost-of-Living and Inflationary Concerns Weigh: PwC 2024 Voice of the Consumer Survey.” PwC. Last modified May 15, 2024.
[5] “Environment and Buying Sustainably Drives Consumer Focus | AHDB.” 2024. Ahdb.org.uk. 2024. https://ahdb.org.uk/news/consumer-insight-environment-and-buying-sustainably-drives-consumer-focus
[6] Punitha, Hannah. 2009. “McDonald’s Waste Account for 30% of Fast Food Litter in UK.” Medindia. January 15, 2009. https://www.medindia.net/news/mcdonalds-waste-account-for-30-of-fast-food-litter-in-uk-46355-1.htm.
[7] NPR. 2009. “McDonald’s Makes Its Logo More ‘Green’ in Europe.” NPR. November 24, 2009. https://www.npr.org/2009/11/24/120738574/mcdonalds-makes-its-logo-more-green-in-europe.
[8]“ Huggies Greenwashing” Charleston.edu. Last modified March 21, 2017. https://blogs.charleston.edu/envt-200/2017/03/21/huggies-greenwashing/.
[9] “Petrochemical Industry – Replacing Fossil-Based Hydrocarbons with Carbon Converstion and Utilisation.” 2024. D-CRBN. December 22, 2024. https://d-crbn.com/industries/petrochemical/.
[10] “Business-Managed Environment – Green Consumerism – Problems – Misleading Green Claims.” 2018. Herinst.org. 2018. https://www.herinst.org/BusinessManagedDemocracy/environment/consumerism/claims.html
[11] “Sustaining the Effort to Update Green Guides.” Eric F. Greenberg, P.C. Last modified 2023. Accessed March 4, 2025. https://www.ericfgreenbergpc.com/articles/sustaining-the-effort-to-update-green-guides/
[12] “SEC.gov | Statement on Updates to the Names Rule.” Sec.gov. Last modified September 20, 2023. https://www.sec.gov/newsroom/speeches-statements/gensler-statement-names-rule-092023.
[13] Reuters. “WisdomTree Pays $4 Million over SEC ‘Greenwashing’ Charges.” Reuters. Last modified October 21, 2024. https://www.reuters.com/business/finance/wisdomtree-pays-4-million-over-sec-greenwashing-charges-2024-10-21/.
[14] Freedgood, Adam. “4 Ways Climate Change Is Affecting Businesses Now.” Third Partners. Last modified January 14, 2025. https://thirdpartners.com/blog/what-brands-need-to-know-about-the-ftcs-green-guides-update/.
[15] “‘Green Claims’ Directive: Protecting Consumers from Greenwashing | Think Tank | European Parliament.” Www.europarl.europa.eu. https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2023)753958.
[16] “FTC Seeks Public Comment on Potential Updates to Its ‘Green Guides’ for the Use of Environmental Marketing Claims.” 2022. Federal Trade Commission. December 14, 2022. https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-public-comment-potential-updates-its-green-guides-use-environmental-marketing-claims.
[17] “SEC.gov | Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices.” 2022. Sec.gov. May 25, 2022. https://www.sec.gov/rules-regulations/2022/10/s7-17-22
[18] “California SB 253 and SB 261: What Businesses Need to Know – Persefoni.” n.d. Www.persefoni.com. https://www.persefoni.com/blog/california-sb253-sb261
Hey Sammy!
Your post demonstrated the challenge consumers face when trying to make sustainable choices — despite environmental advertisements, many of these claims by companies are false. Building off of your points, I wanted to seek out some companies that I have purchased from based on their alleged environmental practices, so that I can avoid them in the future.
1. IKEA: Earthsight, an NGO, discovered in 2020 that IKEA, the largest consumer of wood, sourced its wood through illegal logging in Ukraine. The wood was actually certified by the Forest Stewardship Council, which poses questions for the standards of FSC credibility. In terms of sustainability credentials, IKEA ranks among the highest, which is concerning considering their practices clearly do not reflect a clear commitment to green values.
2. H&M: While fast fashion is widely known as unsustainable, I was surprised to find the magnitude of insincere environmental claims. The Changing Markets Foundation found in 2021 that 96% of H&M’s eco-claims were entirely false. H&M certainly is not the only fashion company outwardly lying to consumers, it just happens to be the one who got caught. A lawsuit followed, but greater consumer action must occur to protest these actions.
3. Volkswagon: Our family owns an electric volkswagon at home, but I was shocked to find that they actually used a defect vehicle in their emissions testing such that software could adjust the amount of emissions when an emissions-test was detected. All the while, the company marketed eco-practices when these cars produced 40x the limit for nitrogen oxide pollutants. This action represents deliberate cheating while making false claims to consumers. It certainly changes my perspective on the company, and though they faced legal repercussions and financial penalties, this makes me question the integrity of regulatory oversight in testing.
I found numerous other examples of companies notorious for “greenwashing” and agree with the policies Sammy mentioned to shift away from voluntary involvement and actually enforce consequences for false environmental actions. If action is not taken, companies will continue to take advantage of consumers and environment, continuing business as usual while hiding corrupt practices. A consumer with good intentions can only do so much, so we must pressure for greater polices and oversight to hold these companies accountable.
I find Sammy’s blog post to be particularly interesting as I have begun to do more research on greenwashing myself. I often find myself looking for the buzzwords Sammy mentioned, using them to help inform my decision-making on which products to purchase. However, after reading this blog post and having discussions with friends and classmates, it is becoming clear that greenwashing is a serious issue that poses a risk to many company’s legitimate sustainability initiatives. One thing that interests me is that a lot of the data Sammy mentioned was from the late 2000s and early 2010s. I wonder if there are any more recent reports or data that reveal how greenwashing is evident today — or if it has stayed the same. Furthermore, I think it would be interesting to know how being aware of how popular greenwashing is impacts consumer’s decisions to buy “sustainably” labeled products. As someone who cares about the environment, I try to use only recyclable materials, purchase “organic” foods and buy from relatively “sustainable” or “eco-friendly” stores. Whether or not these companies all actually practice what they preach, I am not 100% certain of, but I do try and do some background research. However, my background research is usually quite minimal. This makes me wonder if once consumers realize the common greenwashing is, they will stop buying the slightly more expensive product that is labeled as sustainable, and go back to buying the cheaper and obviously “bad” products. Lastly, I would be interested to know more about how likely it is that a bill in Congress would arise and/or pass. If we look at the current state of the government, there are many other pressing concerns, especially surrounding tariffs. As products in general become more expensive, how likely is it that consumers and producers will spend more / dedicate more effort to producing and consuming even MORE expensive sustainable products?
I found the deceptive motivations behind greenwashing highlighted in this blog post quite eye-opening, especially the notion of genuinely conscious-minded consumers being misled in their efforts to support more sustainable companies due to the effectiveness of greenwashing. I also agree that policy action is necessary to increase transparency for corporate social responsibility so that companies that are making tangible sustainability strides are separated from those who cheat the system and “erode consumer trust”. For instance, to be able to claim eco-friendly status or achieve certain environmental certifications, companies should have to establish and hit certain target metrics for greenhouse gas reduction. Patagonia serves as a model for a company that is transparent about climate efforts and has integrated sustainability into its core business model. Patagonia’s strategy sets target reduction goals for Scope 1, Scope 2, and Scope 3 emissions, focusing both on direct emissions from company activities and indirect emissions throughout their supply chain. The company’s near-term goals include an 80% reduction in Scope 1 and Scope 2 emissions, coupled with a 55% reduction in Scope 3 emissions, by 2030 from the 2017 baseline. By 2040, this target is extended to a 90% reduction of absolute Scope 1, Scope 2, and Scope 3 emissions from the 2017 baseline and net-zero emissions across the value chain. These goals are also designated based on standards of the Science-Based Target Initiative, corporate emissions reduction goals compliant with limiting warming to 1.5°C. Patagonia’s founder has also spoken to reducing emissions without extensive reliance on carbon offsets, stressing that purchasing offsets “doesn’t erase the footprint we create”; this action is a strong step to ensuring that corporate progress doesn’t cease after net zero is reached.
Hi Sammy! I really appreciated this post, and it definitely made me aware of paying attention to food labels and understanding if there is any validity to what they are claiming. This is a complicated issue, because on the one hand labels can be incredibly important in ensuring consumers make informed buying choices, but when these labels are abused as a marketing tactic, it can then become destructive and make consumers pay more. I was really captivated by the comment you made about being CFC-free, because it is such a good example of how green-washing is never a lie, it is just misleading. One solution I was thinking about to combat this as it pertains to food in particular is having some standardized labeling method. Modeled after the nutritional index and nordic keyhole as used in Europe for scaling a food’s nutrition, having an optional label referring to how environmentally friendly a product is could he helpful. However, this can cause problems in terms of how that is measured, as well as disadvantaging smaller scale farmers who maybe need to take up more land. As a whole, I believe it is on the right track in keeping consumers informed and avoiding misinformation, although it would need some more fine-tuning so as not to severely disadvantage others.
I really appreciated this blog, it’s hard to understand how pervasive and harmful greenwashing is until we see specific examples in companies that we consume from. I definitely agree that current regulations surrounding greenwashing affect most Americans’ everyday life, which is where greenwashing has the most impact, in grocery stores, clothing brands, fast food, etc, and this is where policy change will be the most impactful. For me, the reason this blog is compelling and effective is because it explicitly states that corporate greenwashing isn’t accidental; corporations are actively choosing to market their products as more sustainable to lure consumers to buy their products. This poses the question: should the US government treat greenwashing/false environmental marketing claims with the same or similar levels of gravity as financial misrepresentations. Both lead to changes in consumer and investor behavior and both deceive consumers. Obviously, financial misrepresentations have the potential to lead to drastically worse situations, such as company bankruptcy, but greenwashing can also be extremely misleading, especially if you are an investment firm that focuses on sustainable corporations. However, it could be argued that some level of corporate greenwashing might be unintentional while financial falsification can’t be. I think before the government is able to effectively regulate greenwashing, there has to be a conservation about how detrimental greenwashing is to consumers, and this blog does a helpful job of starting this.