Greenwashing is the practice of giving misleading information about the environmental benefits of a product, service or business — through exaggeration, selectiveness, vagueness or a lack of evidence. As investors and consumers pay closer attention to ESG, greenwashing has become a serious legal and reputational risk.
Key takeaways
- The EU has adopted rules empowering consumers for the green transition, restricting generic environmental claims that cannot be substantiated.
- Common signs: vague claims, selective claims, self-created labels, and carbon neutrality achieved through offsetting alone.
- Prevent it with a claim review process based on evidenced data.
Seven signs of greenwashing
- Vague claims: "eco-friendly", "green", "clean" without any definition.
- Selectiveness: emphasising one good attribute while hiding a larger impact.
- No evidence: no data and no independent verification.
- Self-created labels: logos and certifications with no independent assessment system behind them.
- Neutrality through offsetting: "carbon neutral" claims achieved mainly by buying credits.
- Commitments without a roadmap: "Net Zero 2050" with no short-term targets or plan.
- Stating the obvious: promoting compliance with mandatory regulations as an achievement.
A process for controlling green claims
- List the environmental claims on packaging, the website, company profiles and reports.
- Every claim must have data, a scope, a measurement period and a source of evidence.
- The legal department or ESG lead approves claims before publication.
- Prefer specific information: "15% less electricity consumed per product compared with 2023" rather than "green production".
- Use independent assessments, such as an ESG rating, to increase credibility.
The more specific the claim, the harder it is to accuse of greenwashing.
The role of governance
The Board of Directors should require evidence for material claims in the ESG report and in external communications.
Frequently asked questions
Is greenwashing penalised?
It depends on the market; many countries deal with misleading green claims under consumer protection and advertising laws, and the EU is tightening its rules on environmental claims.
What is greenhushing?
It is the opposite trend: businesses take sustainable action but do not disclose it for fear of criticism; this reduces transparency and the opportunity to access green finance.
How can environmental achievements be promoted safely?
State specific figures, a clear scope, the base year, the measurement method and the source of verification; avoid absolute terms such as "completely green".
VietESG — Independent ESG rating organisation. Ratings based on disclosed data, supporting evidence and a public methodology aligned with GRI and the SDGs.
