Greenwashing: what it is, why it exists and how to avoid it

Companies want to be seen as sustainable. But the gap between what companies say and what they do has become a problem — for consumers, for regulators and ultimately for the companies themselves. That gap has a name: greenwashing.

Greenwashing is the act of misleading the public into believing a company is doing more to protect the environment than it actually is.¹ The definition sounds simple. In practice, it rarely is.

What does greenwashing look like in practice?

A common case of greenwashing is when a company makes ambitious sustainability goals without any setting any target or credible plan. Let's look at Nestlé as an example. In 2018, the company pledged to make 100% of its packaging recyclable or reusable by 2025, without setting any interim targets to reduce and phase-out single use plastics or a plan on how to get there. At the time, Greenpeace criticised the announcement for relying on vague commitments and lacking a concrete timeline. By 2022, Nestlé had revised its ambition, shifting to designing 95% of its plastic packaging for recycling, while continuing to work toward making 100% recyclable or reusable² — an acknowledgement, in the company's own words, that it would not reach its ambition.

But greenwashing takes subtler forms too.

Sometimes greenwashing is simply a matter of selective disclosure — sharing the part of the story that sounds good, and leaving out the part that doesn't.
Take recycled plastic. Major fashion brands have marketed garments made from recycled PET bottles as a sustainability win. The reality is more complicated. Once plastic bottles are converted into clothing, the material is unlikely to be recycled again — it simply becomes a different kind of waste. It also diverts bottles away from the bottle-to-bottle recycling system, which is genuinely circular and can be repeated multiple times. And every time a synthetic garment is washed, it sheds microplastic fibres. Some 35% of primary microplastics in the ocean come from washing synthetic textiles. ³ In practice, a product marketed on one environmental benefit is causing harm through another route entirely — and the label says nothing about that.

Why does greenwashing happen?

Sometimes this practice is intentional. But often it isn't. Companies tend to use sustainability language without fully understanding what it means, make claims they can't substantiate or communicate the environmental credentials of a product while staying silent on the wider context of how it's produced.

The scale of the problem is significant. According to research by the European Commission, 53% of green claims provide vague, misleading or unfounded information and 40% have no supporting evidence at all.⁴ 

How to avoid greenwashing?

There are three things companies can do.

1. Back up commitments with credible plans. If you pledge to use 80% recycled materials, explain how you'll get there. What needs to change in your design, engineering or business model? What's holding you back? This isn't just good practice. Under the European Sustainability Reporting Standards (ESRS), companies are expected to develop and adopt a transition plan. Those that don't have one yet are expected to say when they will.
2. Make honest comparisons. A claim that a pair of jeans emits 30% less carbon emissions means nothing without context. Compared to what? Last year's model? An industry average? Without that reference point, the claim can easily mislead or be misread as more significant than it is.
3. Know your definitions. Terms like "carbon neutral" and "zero net deforestation" are not self-explanatory, and using them without a clear grasp of what they mean is where many companies get into trouble. The starting point is a clear understanding of your product's or service's actual impact. The language comes after that, not before.

Regulation is catching up

For companies operating in the EU, this is no longer a matter of what's coming — it's already here. The Empowering Consumers for the Green Transition Directive ⁵, which came into force in March 2024 and applicable from September 2026, prohibits a wide range of misleading environmental claims as unfair commercial practices. Generic terms like "eco-friendly," "green" or "climate friendly" are banned unless backed by demonstrated, recognised environmental performance. Claims that a product is carbon neutral based on offsetting are prohibited outright. Future-oriented commitments — such as pledging to reach net zero by a given date — must be supported by a detailed, realistic implementation plan and verified independently. Sustainability labels must be based on a certified scheme or established by a public authority; privately invented labels with no independent verification are no longer permitted.

Sustainability claims are moving from soft commitments to hard accountability.

That's a good thing. The companies that will be in the strongest position are those that get ahead of it: communicating with precision and treating sustainability claims as something that needs to be earned — not asserted.

At Kōan, we work with companies to make sure their sustainability communications are accurate, substantiated and clear. That means helping to document the evidence behind each claim, translating complex information into language that is honest and accessible, and providing the strategic guidance to align what companies say with what they actually do. Whether you are developing a sustainability report, reviewing your communications for compliance with the latest regulation, or building a sustainability strategy from the ground up, we can help you navigate it and say it with confidence.