In recent years, topics like sustainability and environmental protection have become increasingly important. However, the greater the consumer interest in green issues, the more criticism is directed at companies that only appear green on the surface while their core business is anything but sustainable and eco-friendly.
There are many current examples of Greenwashing 2.0—a devious evolution of blatant greenwashing. One of them is currently receiving a great deal of media attention: McDonald’s. In one campaign, for example, the company describes its own trash as "beautiful" because the paper cups or fry cartons are "recyclable" and can be used to make things like books. That is true to an extent—yet McDonald's is still considered one of the biggest waste producers in existence. The counter-offensive from truly sustainable brands like Recup was not long in coming.
Awareness of greenwashing exists in society and is now being increasingly penalized: DWS Group, one of the world's leading asset managers, is even facing legal action over suspected greenwashing of its investments and could be fined millions. Furthermore, the EU Commission has announced a law intended to make the requirements for marketing with environmental and climate claims even stricter.
In this blog post, you will learn everything you need to know about Greenwashing 2.0 and the planned EU directive, and get some do's and don'ts for your marketing.
Greenwashing 2.0
What is it and how do you spot it?
The term greenwashing can be translated as "painting it green." It describes a strategic approach in which companies or other actors deliberately spread misinformation to create an ecological image for themselves.
In recent years, however, "standard" greenwashing with obvious and exaggerated claims has evolved. Many companies are now acting much more subtly and sophisticatedly to project their supposedly green image: they are engaging in Greenwashing 2.0. In many cases, a company's green claims may even be factually correct. However, they are intended to distract from other problems caused by their products or to cover up an environmentally harmful core business.
Examples of this can be found in every industry and sector. For this reason, the environmental organization Deutsche Umwelthilfe created the Golden Vulture—a satirical award designed to expose greenwashing.
In 2022, for example, this award went to Shell: The oil and gas corporation advertised that drivers could offset the CO2 emissions of their trip for just 1.1 cents per liter of fuel. Driving around climate-neutrally: Sounds great, but it's a clear case of greenwashing. For one thing, every kilometer driven emits new CO2 that harms the environment. For another, the stated amount would never be enough to offset it.
Other well-known companies like Edeka, Lufthansa, Volvic… and even HelloFresh were among last year's nominees. While the brand pursues the approach of reducing food waste by providing the exact amount of fresh ingredients needed, the delivery comes in many individual and environmentally harmful small packages. As a result, while HelloFresh may contribute to reducing food waste, it still produces a massive amount of other waste.
The greenwashing or "painting it green" by companies is becoming increasingly subtle and is therefore harder to detect
Info: Typical signs of greenwashing
- Advertising campaigns that emphasize eco-friendly features or practices of a product or company and then highlight these positive aspects disproportionately.
- Influencers used to convey a green image. This involves the use of cleverly chosen terms: wordings like "environmentally conscious," "green," or "sustainable" are not standardized and can be interpreted in different ways, which makes it difficult to verify their claims.
- Seemingly independent studies or certificates intended to strengthen the credibility of the claims. However, these studies can be funded by interest groups or companies, which calls their objectivity into question.
- Instead of disclosing their entire environmental footprint, brands obscure negative environmental impacts or downplay them.
The main goal is to convey a positive and environmentally conscious image to consumers without actually making any significant effort toward sustainability. Companies try to exploit the growing demand for eco-friendly products by positioning themselves as sustainable without taking the necessary measures.
Why is Greenwashing 2.0 problematic?
In the age of sustainability and environmental awareness, consumers are increasingly interested in supporting eco-friendly products and services. According to a survey by the management consultancy McKinsey, sustainability is important to three-quarters of consumers when shopping. That is why brands advertise everything from dog food to hair shampoo by telling potential customers that they are climate neutral.
The problem: A study by the EU Commission from 2020 found that 53.3 percent of the environmental claims examined in the EU were vague, misleading, or unsubstantiated. 40 percent of the claims could not be proven at all.
This new approach to "label fraud" is therefore much harder for consumers to detect and is not only misleading, but also undermines the efforts of genuinely eco-friendly companies.
New EU Directive Against Greenwashing
What is changing?
In light of this, the European Union introduced the “Green Claims Directive” in March 2023. The draft legislation requires companies to only market their products as climate-neutral or environmentally friendly if they can scientifically substantiate these claims. To ensure greater transparency, the data must also be openly viewable and easily accessible – for example, via a QR code on the product.
This is an important step, as there is a growing awareness of greenwashing among consumers: according to a YouGov survey, around 63 percent of Germans surveyed are skeptical of the sustainability claims made by companies and brands.
Companies that cannot provide evidence for their green claims face fines of up to four percent of their annual global turnover. Notably, this EU directive could also have a retroactive effect in many areas, confronting many companies with their misleading advertising claims. Although the draft legislation is not expected to be transposed into national law for another two years, brands must start considering now whether they should use terms like "climate-neutral" or "CO2-neutral" in their communications.
Who does it affect?
By the way: The Green Claims Directive is intended to apply to companies that sell goods or services within the EU and make voluntary environmental claims. Micro-enterprises with fewer than ten employees and an annual turnover of less than two million euros are exempt from the draft legislation – though they can still obtain a corresponding certificate if they meet all the required criteria.
Marketing Do’s & Don'ts
To act truly sustainably as a brand and distance yourself from greenwashing, the motto is “practice what you preach” – in other words, walk the talk. These do’s and don’ts will help with implementation:
Transparent Communication
DO: Make clear, precise, and honest statements about the environmental impact of your products and the areas where improvements are needed. Use only genuine, verifiable terms.
DON’T: Market vague, exaggerated claims or standard practices as unique features; avoid misleading packaging or the use of suggestive imagery.
Best Practice: Wholey. The brand has calculated the carbon footprint and life cycle assessment for every product and published them on their website. This includes ingredients, production, transport, and the end-of-life phase of the packaging.
Verifiable Evidence
DO: Use verifiable figures and facts regarding environmental efforts, as well as awards from recognized certification bodies such as the EU Ecolabel, the Blue Angel, or the Green Button. The German government provides an overview of the various labels in an initiative.
DON’T: Use fake or self-made labels, or actively conceal negative ratings.
Best Practice: ARMEDANGELS. The fashion label works with selected, long-term partners and goes through a certification process with them. They are certified with recognized labels from GOTS (Global Organic Textile Standard) and the Fair Wear Foundation (FWF).
Honest Sense of Responsibility
DO: Make sustainability efforts a core part of your company culture and showcase them externally.
DON’T: Jump on the sustainability bandwagon just to gain more followers and leads.
Best Practice: NIKIN. Since its inception, the brand has planted one tree for every product sold through the NGO One Tree Planted – wherever it makes ecological sense and forests are threatened by deforestation or natural disasters. The company fully commits to its sustainability mission: during the year's biggest shopping event, Black Friday, they offer an extra tree instead of price cuts and discounts.
Conclusion
Greenwashing is a serious problem that harms the environment and can undermine consumer trust: According to a recent survey by the Nuremberg Institute for Market Decisions (NIM), 72 percent of respondents avoid companies accused of greenwashing. The planned EU Green Claims Directive could bring groundbreaking changes and far-reaching impacts on the economy and marketing. Above all, brands that can scientifically substantiate their environmental friendliness will emerge as winners, strengthen their credibility, and have a genuinely positive impact on the environment.
