Recognizing and Avoiding Greenwashing

“Companies with relevant and verifiable environmental attributes can strengthen their market position through authentic communication.”

Why Greenwashing Is a Compliance Issue in 2026

Sustainability communication is under increased scrutiny. With the EmpCo Directive (Empowering Consumers for the Green Transition), the EU is establishing a clear legal framework for environmental and sustainability claims.

We’ve explained in detail what this means for companies in our blog post on “EmpCo & the Green Claims Directive.”

One thing is clear, however:

• Broad environmental promises without a solid basis will be prohibited in the future
• Offset-based climate neutrality claims will become a no-go
• Proprietary sustainability labels without a recognized certification system will be severely restricted

Greenwashing has thus definitively shifted from a moral debate to a legal assessment.

What Is Greenwashing?

Greenwashing occurs when companies appear more sustainable than they actually are or cannot sufficiently substantiate their claims. This does not always involve deliberate deception or malicious intent. Ambiguous wording, selective presentation, or missing data can also be problematic and mislead consumers.

The Most Common Greenwashing Pitfalls

The “Six Sins of Greenwashing” – a concept developed by the consulting firm TerraChoice based on a 2007 analysis – provides a solid foundation for an initial assessment of sustainability claims. Many of the “sins” described back then are still encountered today.

1. Hidden Trade-Offs (Sin of the Hidden Trade-Off)
Individual positive aspects are heavily emphasized, while significant negative characteristics go unmentioned.

Key Questions:

• Is a single characteristic emphasized very strongly?
• Are relevant negative impacts left unmentioned?
• Does the claim refer to a key component of the product?

2. Lack of Evidence (Sin of No Proof)
Claims are made without reliable data or external verification.

Guiding Questions:

• What data or product characteristics support the claim?
• Is there reliable data based on recognized scientific principles?
• Is the presentation of the data explained in a way that is easy to understand?

Recommendation: With regard to the EmpCo Guidelines, the “Sin of No Proof” is a key aspect that is crucial for compliance. In the future, every environmental claim must be verifiable and based on a solid data foundation. Recognized scientific standards (e.g., the Greenhouse Gas Protocol) and independent certifications play a central role.

3. Vague Statements (“Sin of Vagueness”)
General, ambiguous statements and broad terms are used without clear definitions or context.

Key Questions:

• Does the statement refer to the product, a component, or a process?
• Is it clear which property is being promoted?
• How is the statement understood, or what is being implied?

Recommendation: With regard to the EmpCo guideline, the “Sin of Vagueness” is another important aspect. So-called “general environmental claims” involve vague statements and the use of terms such as “environmentally friendly,” “sustainable,” or “green,” as they suggest a positive impact on the environment. In the future, companies must clearly, comprehensibly, and verifiably demonstrate that such a positive impact exists.

4. Irrelevance (Sin of Irrelevance)
Features are highlighted that have no relevant benefit, as they are taken for granted or represent minimum legal standards.

Key questions:

• How relevant is the feature to the consumer in terms of environmental and social sustainability?
• Are individual features highlighted that are standard in the industry?

5. Lies (Sin of Fibbing)
False or misleading statements about environmental characteristics that a product or company demonstrably does not possess. This also includes the deliberate distortion of facts.

Key questions:

• Are the statements truthful?
• What facts support the statement?

6. The Lesser of Two Evils (Sin of Lesser of Two Evils)
A product is advertised as “environmentally friendly” because it causes comparatively less harm within its category, even though the entire product category is environmentally problematic. Or a comparison is made with an even more harmful product.

Key questions:

• Is an improvement within a problematic category presented as fundamentally sustainable?

7. False Labels (Sin of Worshiping False Labels)
In addition to the original six sins, another category plays a significant role in communication due to the sharp increase in sustainability labels.
Unrecognized or fabricated labels are used to suggest an eco-friendly image.

Key questions:

• Is an officially awarded label being used?
• Are the criteria and the certifying body transparent and understandable to consumers?

Recommendation: With regard to the EmpCo Guidelines, the “Sin of Worshiping False Labels” is another important aspect. Recognized sustainability labels and seals can be used as evidence of an environmental claim, but they must be based on a certification system or awarded by a government agency. Private labels will not be permitted in the future.

The Risks of Greenwashing

Some representatives from industry and commerce view the new implementing law critically.
Greenwashing aims to improve a company’s image through exaggerated sustainability and environmental claims that are not supported by facts. Often, the messaging is eye-catching and instantly memorable, which quickly misleads consumers and thus deceives them. In the long term, greenwashing undermines the trust of customers and other stakeholders. The loss of credibility goes hand in hand with reputational damage and the loss of business opportunities. Finally, there is the legal risk of receiving a cease-and-desist letter, which has been exacerbated by the incorporation of the EmpCo Guidelines into the Unfair Competition Act.

The EmpCo Directive as an Opportunity for Companies

The regulatory guidelines of the EmpCo Directive on sustainability communication primarily protect consumers and strengthen trust in sustainability claims. At the same time, they create a level playing field within the EU and promote sustainable consumption patterns. Companies with relevant and verifiable environmental credentials can strengthen their market position through authentic communication and differentiate themselves from competitors who engage in greenwashing practices. What matters is not communicating more or less, but communicating more precisely, substantively, and transparently.