What is Greenwashing? Greenwashing, or eco-posturing, refers to companies using misleading environmental claims to capitalize on the rising demand for sustainable practices without making meaningful changes to their operations. Coined in the 1980s, the term remains relevant as concerns about climate change intensify.

Today, this deceptive practice is addressed by three European Union (EU) directives—Consumer Empowerment, Environmental Claims, and Reparability (making it possible to easily repair a product) —aimed at combating false sustainability narratives. Together, they seek to protect consumers and ensure companies' green claims are authentic and verifiable.

Consumer Empowerment and Trust
The EU Consumer Empowerment Directive (2024/825) imposes stricter standards for environmental claims and bans planned obsolescence and false sustainability statements. “It’s about building trust between consumers and companies,” said Cristina Monge, emphasizing the need for integrity in corporate green policies. ‘We need those policies that companies present as green to be true,’ she stressed, during the opening of the event ‘Let's talk about greenwashing,’ organised by ETHIC.

The stakes are high: 56% of EU consumers consider environmental criteria when making purchases, according to a European Commission survey. However, eight in ten consumers report needing more information to differentiate between genuinely sustainable products and greenwashed ones. ‘There is an enormous level of awareness among citizens,’ said Andrés Barragán, Secretary General held at the Círculo de Bellas Artes in Madrid, who opened the event. However, “Consumers often feel powerless,” he noted. “The consumer is the final link in the production chain. If empowered, they can drive systemic change.” Barragán highlighted that the upcoming Spanish Sustainable Consumption Law, rooted in EU directives, will help align corporate sustainability with consumer trust by integrating environmental, social, and economic dimensions.

The Wider Problem
Beyond misleading advertisements, greenwashing contributes to a broader issue: planetary degradation. “There will be no transition if greenwashing persists,” warned Helena Viñes, chair of the European Sustainable Finance Platform. She pointed to alarming findings from the Intergovernmental Panel on Climate Change (IPCC), which revealed a 14% rise in global emissions this decade—despite pledges from major corporations to achieve carbon neutrality.

 UN Secretary-General Antonio Guterres made no secret of his surprise and concern at these figures, especially since 80% of global emissions were accounted for by a handful of large companies that, shortly before, had made numerous pledges to achieve carbon neutrality. ‘It has been a litany of broken promises,’ he said Guterres, warning that although the pledges had been made in the past, they were not yet being fulfilled. Insofar, Viñes called for tighter accountability, noting that ‘Around a third of the world's largest listed companies have announced their commitment to carbon neutrality, but the impact of these commitments remains questionable.’ By 2050, if polluting emissions are not reduced, the planet will face more extreme heat waves and unprecedented storms. ‘We have 25 years left, ladies and gentlemen,’ he stressed.

Balancing Sustainability and Competitiveness
Pablo Arias, a Member of the European Parliament’s Internal Market and Consumer Protection Committee, stressed the importance of balancing environmental regulations with business competitiveness. “Ninety-nine percent of European businesses are SMEs (Small and Medium Enterprises),” he explained, urging clear, affordable rules to enable their compliance.

Transparency is equally crucial. “Consumers deserve clear, accessible information about companies’ environmental practices,” Arias said, warning that misleading claims undermine the efforts of genuinely sustainable businesses. ‘Companies that comply cannot be called into question because there are others that do not comply and provide misleading information.’

The Role of Legislation
Daniel Arribas González, Director General for Consumer Affairs, highlighted the consumer confusion stemming from the proliferation of sustainability claims. “When everything is labeled green, nothing feels green to consumers,” he said, underscoring the importance of robust legislation both to deter those entities that are not doing the right thing and to motivate those that are doing genuine efforts in the green transition by providing incentives.

‘Consumer empowerment must come, of course, from better information, but there must also be other support mechanisms through the work of public administrations,’ said Beltrán Puentes, Professor of Administrative Law at the University of Santiago de Compostela (USC). The implementation should include significant and dissuasive sanctions, not only of an economic nature. ‘The biggest impact for companies of a certain size is undoubtedly the reputational cost, which can motivate a change in them and in other companies in the sector.’

Josep Hurtado, legal coordinator for Ecologists in Action, criticized the insufficient enforcement of existing regulations. He pointed to the UK as an example, where misleading advertisements are swiftly withdrawn. Hurtado and other experts called for harsher penalties and greater accountability for corporate executives engaging in greenwashing.

Towards a Greener Future
Clara Vázquez, Head of Sustainability at the Confederation of Consumers and Users (CECU), advocated for sustainable products to become the norm rather than a luxury. “Responsibility cannot rest solely on individual habits,” she argued, proposing a ban on fossil fuel advertising and the establishment of a dedicated observatory to monitor greenwashing.

Closing the event, ETHIC founder Pablo Blázquez reflected on the shift in corporate priorities. “We’ve moved beyond Milton Friedman’s notion that ‘it’s just business.’ Today, companies must embrace social and environmental values to create true, lasting impact.”

See, El ‘greenwashing’, ¿contra las cuerdas?