In today's business world, sustainability is a key factor influencing consumer choices, far beyond just being a buzzword. Brands across industries are keenly showcasing their eco-friendly initiatives. Transparent communication of these efforts is essential for companies to build trust. Yet, they face two main challenges: greenwashing, where businesses falsely amplify their environmental actions, damaging consumer trust, and greenhushing, where they avoid discussing their green initiatives due to fear of criticism, potentially slowing environmental progress.

This guide is designed to navigate these challenges. We have successfully litigated against greenwashing in several high-profile cases, including those involving Primark, Shell, and Arla. These cases provide valuable insights into sustainable communication, which we use to advise our clients on effective sustainability messaging. We'll cover frequently asked questions and share key lessons from these cases, helping you to make genuine sustainability claims with confidence.

FAQs
What is greenwashing?
Greenwashing is the practice where companies mislead consumers by claiming that their company or products are (more) sustainable than they truly are – or at least without having sufficient evidence to support their claims.

Some examples:

• A product is marketed as "eco-friendly" based on selective, favorable criteria while neglecting significant environmental drawbacks.
• The use of ambiguous, appealing terms such as "natural" implies an environmentally conscious choice, yet these claims lack precise, confirmable details.
• Misleading claims are made about a product's environmental benefits that, upon closer examination, merely meet existing legal standards and do not represent additional sustainability efforts.
• Products are positioned as marginally better options within inherently unsustainable categories, glossing over the more substantial, negative environmental impacts they may have.

Why is greenwashing problematic?
It not only misleads consumers but also undermines trust in sustainable products, making it challenging for individuals to make informed environmental choices. Furthermore, it detracts from the credibility of genuinely sustainable initiatives, harming the overall effort to promote environmental sustainability. This phenomenon highlights the importance of transparency and accountability in corporate environmental claims, ensuring that consumers can trust that the products they purchase are truly contributing to sustainability efforts.

What key entities address greenwashing and what are their powers?
Sustainability advertising is regulated at both the national and international level. In the Netherlands, regulations include the Dutch Civil Code sections on Consumer law and Advertising. At the EU level, regulations encompass the Unfair Commercial Practices Directive, the Corporate Sustainability Reporting Directive (effective from 2024/2025), and the upcoming Green Claims Directive.

Key players in enforcement of sustainability regulation are the Dutch Authority for Consumers and Markets (ACM), the Dutch Advertising Code Committee (ACC), and the Dutch civil courts.

• The ACM enforces the above regulations and has the discretion to issue fines. The ACM also provides helpful resources such as guidelines for sustainability advertising.
• The ACC deals with the self-regulation system of advertising in The Netherlands. Anyone who feels that an advertisement violates the Dutch Advertisement Code may submit a complaint with the ACC. This Code contains a dedicated section for sustainability claims. Although the ACC lacks the power to impose fines, it makes its decisions public, often resulting in heightened public scrutiny.
• The Dutch civil courts can impose (EU-wide) injunctions subject to penalties, e.g. at the request of market competitors, consumers or foundations. EU-wide measures are possible (and even rather common in advertisement law) because most applicable rules are EU-harmonized.

What future developments can we expect in legislation against greenwashing?
The European Parliament has just agreed on new (stricter) legislation to combat greenwashing: the Green Claims Directive. Under this legislation, sustainability claims will soon be required to be based on substantiated and externally verified methods. The entire lifecycle of a product must be documented, and clarity will be introduced to the multitude of environmental labels. Claims of a company being climate-neutral will only be deemed acceptable under strict circumstances. The Green Claims Directive awaits implementation, with discussions on the final form of the legislation with EU member states set to start after the summer.

Key lessons from our cases against Primark, Shell, and Arla
Through litigation against greenwashing, we've extracted essential insights emphasizing the necessity of clear and truthful sustainability communication. Below are key lessons from our recent cases to help you sidestep greenwashing allegations and preserve your brand’s integrity.

Lesson 1: Clearly define your sustainability claims
"What's in a name? That which we call a rose / By any other name would smell as sweet."

While Shakespeare famously questioned the importance of names, in sustainability communication, precise terminology is essential. It's vital to not just understand but also to clearly express the meaning of terms used in your sustainability claims.

Translated: "We make our clothing circular. So that the world keeps spinning."

The phrase 'circular' used by Primark actually meant to imply 'recyclable'. This ambiguity led the ACC to consider it misleading. It's vital for companies to present their environmentally friendly practices in a clear and straightforward manner.

Furthermore, while broad terms like 'sustainable' are appealing in marketing, Primark's use of 'sustainable cotton' lacked clarity. Effective communication is about more than just using buzzwords; it's about explaining why a product is sustainable, supported by solid and verifiable evidence. The burden of proof lies with the advertiser. The ACC pointed out that Primark should have directly explained what 'sustainable' means in their advertisements, rather than redirecting consumers to a QR code for further information. This approach would ensure consumers receive complete and clear information upfront.

Lesson 2: Set realistic and measurable goals

Translated: "We develop hydrogen for the regional buses of tomorrow. We are changing for a cleaner future. Search online for Shell."

In the "We Are Changing" campaign, Shell showcased various initiatives, including this one about the development of hydrogen for public transport. The ACC found Shell's communication lacking in clarity regarding its sustainability ambitions and execution, emphasizing the importance of transparency in how companies intend to realize their vision for sustainability. Merely urging people to 'search online for Shell for more information is deemed insufficient. Sustainability goals must be more clearly specified in the campaign itself, or, if this is not possible, through direct references to detailed information on a website, for example.

Translated: “Education for equality. Opportunities for everyone.”

Numerous companies, Primark among them, are making efforts to bridge wage disparities and enhance diversity and inclusion in the workplace. While these pledges are commendable, they must also be grounded in reality and specificity. Primark's well-intentioned statement fell short of providing a tangible, measurable target, rendering it challenging to gauge the effectiveness of their educational initiatives in creating "opportunities for all." This lack of specificity led the ACC to deem the statement misleading, underscoring the necessity for clear and achievable goals in corporate commitments.

Lesson 3: Steer clear of partial truths

Translated: "Seamfree separates made from recycled nylon” (on the poster) "50% recycled nylon" (on the label)

The poster implies that the garment is entirely made from recycled nylon, but examining the label shows that only 50% of it is recycled nylon. This notable discrepancy, as highlighted by the ACC, means the original claim is misleading. It underscores the critical need for total honesty in marketing communications, stressing the importance of avoiding claims that are only partially accurate and ensuring full transparency in all messaging.

Lesson 4: Avoid hiding details in fine print
A key lesson from our case against Arla is the importance of clear communication, especially when it comes to the fine print. On Arla's website, vital information was obscured when advertising “Climate Neutral” claims. Only after scrolling to the bottom of the page, following eight scrolls, could one find a subtle, easily overlooked statement indicating “climate neutral *according to Climate Neutral Group guidelines". The ACC found that the average consumer is not adequately informed about Arla's specific meaning of 'climate neutral', which is tied to the Climate Neutral Group label – a definition far narrower than the general expectation of the relevant consumer. The ACC identified this as misleading, highlighting the need for clear and upfront communication.

Drawing from the Primark case, it's clear that transparent communication holds critical value, especially concerning the specifics buried in the fine print. In Primark stores across the Netherlands, significant details were often obscured in small text underneath bold proclamations.

For instance:

Translated: “reduce CO2 emissions by 50%, so that our planet can breathe freely”

Primark boldly advertised its objective to cut CO2 emissions by 50%. Yet, the fact that this audacious claim was still only an ambition was only qualified in the fine print – specifying that this target was set for 2030, without an explicit strategy for realization. The ACC labeled this as misleading.

Another example:

Translated: “No more disposable plastic. For our own planet”

To the average shopper, this statement might imply that Primark has already eliminated disposable plastics. However, a detailed inspection reveals that this goal is aimed for 2027 – mentioned in small print. Besides that, a concrete plan or guarantee of fulfillment was lacking. The ACC likewise identified this as misleading, accentuating the necessity for direct and clear communication of environmental objectives and advancements.

Next steps
These cases are a crucial reminder for brands everywhere that sustainability is more than a marketing tactic; it's a commitment that demands genuine action and clear, transparent communication.

If you need further insights on these cases, advice on sustainability communication, or help in identifying and addressing greenwashing, Laura van Gijn (laura.van.gijn@deroos.eu) and Rik Nierop (rik.nierop@deroos.eu) are just a message away.