Greenwashing: how to avoid misleading your customers

Pretending to be more sustainable than you are is called greenwashing. It seems harmless: exaggerating your green actions to show your customers that you are a sustainable business. But greenwashing can make you look bad. You could even be fined for it. These five rules of thumb will help you avoid greenwashing by accident.

This is greenwashing

If you are advertising products made from sustainable materials while neglecting to mention that the manufacturing process used is harmful to the environment, you are guilty of greenwashing: omitting information, making misleading promises, exaggerating, or lying about your green processes and procedures.

Accidental greenwashing

Pretending to be ‘greener’ than you really are can be a marketing trick. But greenwashing is not always deliberate. For example, if a paper manufacturer puts "100% recycled content" on a box containing white paper, that is greenwashing. Why? It is not clear whether the statement applies to the box or the paper.

Risk of greenwashing

Companies will use terms such as ‘carbon-neutral’, ‘environmentally friendly’, or ‘circular’ without being able to prove that this really is the case. This is, in fact, prohibited by law. Engaging in greenwashing can have unpleasant consequences for your business. It can cause you to have a negative reputation among (potential) clients. And you can be fined for it. This can amount to up to €900,000 per offence, or part of your turnover.

How to avoid greenwashing

The Dutch Authority for Consumers & Markets (ACM) conducts research into greenwashing. They warn companies that spread misleading information about the sustainability of their products and impose fines on these companies. With this approach, ACM protects companies that honour their commitments from competitors that make idle promises.

If you sell products you claim to be ‘green’ or ‘sustainable’, you must follow the rules of thumb set by ACM (in Dutch), as outlined below:

1. Clearly explain what makes your product sustainable

Explain in clear and comprehensible language what makes your product or service sustainable. Be honest, straightforward, and accurate. Example: a jeans manufacturer tells consumers that a new production process has helped it cut down its water consumption by 37%. This is more accurate than if this company were to claim: “This pair of jeans is sustainable.”

2. Back up your promises of sustainability with facts

Prove that your promise of sustainability is true and not outdated. Suppose you have a courier company and you promise to drive greener than your biggest competitor. To prove that, you use a survey from five years ago. Then your promise may not be true today. So, check your products and production process regularly. Renew or improve your sustainability promises if necessary.

3. Comparisons with other products, services, or businesses must be honest

“This pair of jeans is 50% more sustainable than brand X jeans.” You are allowed to make comparisons when promoting your products, but your claims must be accurate. You must specify what you are comparing your product or business with, and you should not cause confusion among your customers. Only compare the same types of products.

You will also create confusion by leaving out information. Example: ACM noticed a milk carton containing the claim “30% lower carbon emissions.” It will not be clear to consumers what the comparison relates to and what ‘less’ refers to. An investigation conducted by ACM revealed that this referred to 30% lower carbon emissions in manufacturing milk cartons compared to the old packaging.

4. Be honest and clear about your sustainability initiatives

If only one of your services or products is sustainable, you are not allowed to say that your business as a whole is sustainable. For example, an energy provider is not allowed to bill itself as a ‘clean’ provider if it supplies mainly fossil fuels alongside green energy.

So, you should check whether the promise applies to the company as a whole or, for example, only to the production process or production stage. You are also permitted to tell your customers about other sustainable practices you plan to introduce in the future, provided that you clearly state that these are future plans. You should also disclose the current impact of your business on people, animals, and the environment.

5. Make sure logos and quality marks are helpful to customers, rather than confusing

You are only permitted to use symbols, quality marks, and logos (in Dutch) if their publisher has given you official permission to do so. Make sure the quality mark aligns as much as possible with the claims you make about your product, service, or business. If you, as a business owner, want to show your customers that you are working on reducing your carbon emissions, you can choose, for example, the Climate Neutral Certified quality mark. The EKO quality mark may be right for your business if you produce organic food. Restaurants and other businesses can use this quality mark to demonstrate that they use only pure, organic products and do not offer any endangered fish species on the menu.