Greenwashing is today among the most documented brand trends, but also among the most costly risks an organisation can incur.
The European Commission estimates that 53% of environmental claims circulating on the European market are vague, misleading or unfounded.
40% are not supported by any verifiable evidence. 76% of non-food products carry at least one environmental reference in their communication or packaging.
These figures describe a practice that European regulators have decided to sanction with increasingly precise tools, but from September this year, 2026, the rules are set to change further, and organisations that have not prepared will find themselves exposed to legal, financial and reputational risks that go well beyond any single case.
The purpose of this article is to define greenwashing: its history, the most significant cases, the related sanctions; setting out the current regulatory framework and analysing the concrete risks for brands that do not govern their own environmental claims.
What greenwashing is: definition and origins
The term greenwashing was coined in 1986 by environmentalist Jay Westerveld to describe hotels’ practice of inviting guests to reuse towels in the name of the environment, concealing a purely economic interest behind an ecological message. Since then, the definition has extended to any practice in which an organisation presents itself as more sustainable than its actual operations demonstrate.
In operational terms, greenwashing occurs when there is a measurable gap between a brand’s environmental claims and its actual behaviour. That gap may be intentional or unwitting. The regulatory system does not distinguish between the two: what matters is whether the consumer is led to believe something that cannot be verified.
Be careful, though: greenwashing is not a communication problem but, rather, a governance problem. The claim comes before the substance that should support it. And when that substance is missing, or insufficient, the risk is serious.
How greenwashing manifests itself: the most common patterns
Greenwashing takes different forms. Some are obvious; others call for closer analysis. Supervisory authorities have documented four main forms.
1. The generic, unverifiable claim
The use of terms such as “sustainable”, “eco-friendly”, “green” or “natural” without an operational definition and supporting evidence. Directive (EU) 2024/825 has explicitly added the use of these generic environmental claims to the list of unfair commercial practices where the company cannot demonstrate the environmental performance it intends to claim.
2. The partial claim
Communicating the environmental benefits of one aspect of a product while omitting the negative impacts of the overall production cycle. A brand that emphasises recyclable packaging while ignoring its production emissions falls into this category.
3. Offset-based climate neutrality
Declaring a product or company “carbon neutral” or “zero impact” through emissions offsetting mechanisms, without demonstrating a real reduction in emissions at source. The Directive explicitly prohibits such claims when they are based solely on offsets.
4. The uncertified sustainability label
Displaying logos, labels or badges that suggest environmental certification when no certification scheme approved by a public authority or an accredited certification body exists. A widespread practice that current legislation has placed among those prohibited.
Documented examples of greenwashing that led to penalties
The examples we could give are endless: many of them still on air today in advertising in our country and around the world.
To name just a few, there is DWS, Deutsche Bank’s asset management division, fined 25 million euros in Germany for claiming to be an ESG leader without supporting evidence. The case marked one of the first significant enforcement actions in the financial sector.
In 2025, the Italian Competition Authority fined SHEIN €1 million for environmental claims deemed vague, generic and excessively emphatic. In France, the same brand received a €40 million fine for misleading commercial practices.
A civil court in Paris ordered TotalEnergies to stop communications describing its products as “carbon neutral”, imposing a penalty of 10,000 euros per day until compliance. The decision was read as a signal of the level of accountability European courts are imposing on large organisations.
In March 2024, the Amsterdam court ruled that 15 of KLM’s 19 environmental claims were misleading, as they presented the environmental impact of air travel in an excessively positive light. In 2025 the environmental organisation DUH won a similar case against Lufthansa in Germany.
The pattern common to these cases is always the same: environmental claims produced before the organisation had built the operational structure capable of supporting them (or had any intention of doing so).
The regulatory framework: what changes from 27 September 2026
The sanctions regime has already changed.
Directive (EU) 2024/825, adopted on 28 February 2024 and in force since 26 March 2024, amends the Unfair Commercial Practices Directive and the Consumer Rights Directive. Member States were required to transpose it by 27 March 2026. Its provisions become fully applicable from 27 September 2026.
In Italy, the Council of Ministers gave preliminary approval to the transposition decree in November 2025 (D.Lgs. 30/2026). The decree amends the Consumer Code, strengthening the rules on unfair commercial practices relating to environmental claims.
The practices now explicitly prohibited include: (i) the use of generic environmental terms without proof of the claimed performance; (ii) the display of sustainability labels not certified by public authorities or accredited bodies; (iii) claims of climate neutrality based solely on offsetting without any real reduction in emissions; (iv) presenting a product as sustainable as a whole when only one aspect of it is.
Penalties can reach 4% of a company’s annual turnover. For a business with a turnover of 50 million, that means potential exposure of €2 million per individual breach.
The concrete risks for brands: legal, reputational, financial
In cases like these, the legal risk for a brand is the most immediate: AGCM sanctions, court rulings, class actions brought by consumer associations. But it is not the only one.
Reputational risk tends to have a longer-lasting impact that is harder to measure. Court rulings and regulatory sanctions become news. 61% of consumers already say they find it difficult to distinguish genuinely sustainable brands from those that merely claim to be, and 44% do not trust the environmental information available. In these conditions, a documented case of greenwashing amplifies the distrust that already exists across the entire category.
The financial risk, however, goes well beyond direct penalties. Large institutional investors, pension funds, asset managers and ESG funds assess environmental credibility as a risk variable in portfolio construction. A brand caught in a documented case of greenwashing may face consequences for its cost of capital and its access to certain types of investment.
The most underestimated risk remains the internal one. Organisations that make environmental claims without internal verification governance create an expectation in the market that their own operational teams must then meet. When the gap between claims and operations becomes evident internally, the cost is credibility with their own employees.
From claims to governance: how to protect yourself properly
The standard response to greenwashing risk is a communication one: review the claims, remove the most exposed ones, add disclaimers. It is the wrong response, or at least an insufficient one.
Greenwashing stems from the absence of a system that defines, before any public statement, which environmental claims the brand may make and with what supporting evidence. Communication is the last link in a chain that begins with strategy and operational governance.
A governance system for environmental claims answers three questions before anything is published. The first: is the claim supported by verifiable data, produced by independent sources or by certifiable internal processes? The second: does the claim describe the entire operational reality or only a selected aspect? The third: if a supervisory authority requested the documentation supporting this claim, would we be able to produce it within 30 days?
If the answer to even one of these questions is uncertain, the claim should not be made. That preparatory work, which precedes communication and makes it sustainable, is exactly what distinguishes an exposed brand from a protected one.
Directive (EU) 2024/825 has exposed a pre-existing problem: the absence of governance over environmental claims. Those who build it now will turn compliance into a competitive advantage.
Those who wait will face the risk with the wrong tools.
New Connections (FAQ)
Are SMEs also at risk of greenwashing penalties?
Yes. Directive (EU) 2024/825 applies to all businesses that address consumers in the European market, regardless of size. Micro-enterprises benefit from some exemptions during the transitional phase, but the environmental claims prohibited by the directive (generic claims, uncertified sustainability labels, climate neutrality based solely on offsetting) are prohibited for everyone. The AGCM has already imposed penalties on brands of various sizes in Italy.
Can I write “sustainable” or “eco-friendly” on the product packaging?
From 27 September 2026, no, not without evidence. The Directive explicitly prohibits these terms when the company cannot demonstrate, with objective data, the environmental performance the term intends to claim. The Italian legislative decree transposing the Directive has incorporated this restriction. Brands currently using these claims have until the date of application to comply or to document them.
What happens if we receive a complaint from the AGCM?
The AGCM opens an investigation and requests documentation supporting the contested claims. If the documentation is not provided or proves insufficient, the authority can impose fines of up to 4% of annual turnover, order the practice to cease and impose corrective measures. Proceedings vary in length, but the most recent cases show they are being closed more quickly.
Is emissions offsetting not enough to claim carbon neutrality?
Under current legislation, declaring a product or an organisation “carbon neutral”, “zero impact” or equivalent on the basis of offsetting alone, without any real reduction of emissions at source, constitutes an unfair commercial practice. The claim is permitted only if accompanied by data on actual reductions and by calculation methodologies certified by third parties. The TotalEnergies case is the benchmark European ruling on this point.
How do you build a governance system for environmental claims?
The starting point is an audit of the environmental claims currently present across all brand communication: website, packaging, sales materials, social media profiles. For each claim, you check whether verifiable supporting documentation exists. Unsupported claims are removed or suspended until the necessary documentation is obtained. In parallel, an internal process is defined that requires documentary verification before any new environmental claim is made. The system does not require a complex ESG structure: it requires a clear policy and a person accountable for approval.
Does greenwashing only concern “green” sectors such as fashion or food?
The best-documented cases come from aviation, financial services, energy and fashion. But the legislation makes no distinction by sector: it applies to any organisation that makes environmental claims aimed at consumers. In B2B the risk is growing, because large institutional buyers include their suppliers’ environmental credibility in their qualification processes. An unsubstantiated environmental claim in sales materials can jeopardise a supplier selection process as well as create regulatory risk.