Understanding Greenwashing

"Eco," "bio," "100% organic." Today, "green" labels appear more and more frequently, including among clothing brands. However, some brands spend more resources promoting a "green" image than on actual environmental initiatives. This marketing practice is called greenwashing (from the English "green" + "washing").

On October 22, 2024, the Federal Antimonopoly Service (FAS) presented recommendations aimed at combating greenwashing, and last year Russia established a Council for the Prevention of Greenwashing, which published a checklist for verifying environmental claims.

This issue is more relevant than ever. Consumers are increasingly focused on the eco-friendliness of products: over the first five months of 2024, consumer interest in environmentally friendly goods grew by 87% compared to the same period the previous year. Greenwashing, on the other hand, hinders the development of genuine sustainable development practices and undermines trust in environmental initiatives.

In this article, we try to figure out which brands have already been accused of greenwashing and what legal liability measures exist for such unfair marketing practices.

Greenwashing (from the English "green" + "washing") is a form of environmental marketing in which a company makes false or misleading claims about its environmental responsibility in order to create the impression among consumers that its products or activities are more environmentally "clean" than they actually are. In other words, when something non-eco-friendly is presented as eco-friendly.

It is a kind of marketing strategy in which a firm spends resources promoting a "green" image rather than on real environmental initiatives. The term was coined in 1986 by eco-activist Jay Westerveld.

Examples of greenwashing can include:

Greenwashing misleads consumers who are trying to choose more environmentally friendly goods, and it diverts attention from real problems related to sustainability and environmental protection.

The loudest greenwashing scandal in Russia broke out in 2020 around the H&M brand. An investigation by an eco-journalist revealed that clothing collected by the retailer from customers for recycling was not actually being recycled, but instead was sent for resale in the Moscow region. The case never reached court (possibly because there were no interested parties), but the story severely damaged the brand's reputation.

The American division of H&M was less fortunate. In 2022, consumers filed a class action lawsuit against the brand in federal court in New York. H&M was accused of running a broad marketing campaign to "greenwash" its products — that is, positioning them as environmentally friendly. The company actively used eco-tags that misled consumers. In particular, according to information on some products, their production used, on average, 20% less water. Additionally, in advertising for the Conscious collection, the retailer claimed that the items were made of "at least 50% sustainable materials, such as organic cotton and recycled polyester." An independent study did not confirm this information. In December 2023, the parties reached a settlement and the plaintiffs withdrew the suit.

The sporting goods retail chain Decathlon has also been accused of greenwashing. In 2022, the Netherlands Authority for Consumers and Markets conducted an investigation and found that the retailer made unsubstantiated claims about manufacturing products exclusively from environmentally friendly materials. The investigation determined that the chain used an "Ecodesign" sustainability label without explaining the basis for the claim, and did not provide sufficient information about its "environmental labeling system." Decathlon subsequently agreed to remove all unsubstantiated environmental responsibility claims from its websites.

In July 2024, the American-Canadian sportswear brand Lululemon was hit with a "global greenwashing" lawsuit from consumer eco-activists. The company is accused of misleading consumers by positioning itself as "sustainable," making unfounded claims about its commitment to environmental care in its "Be Planet" promotional campaign.

In the United States, where the number of greenwashing disputes grows every month, the most commonly cited authorities are the guidelines and laws of the Federal Trade Commission (FTC). Under these, companies should avoid broad environmental claims or clearly qualify them to prevent deception regarding the specific nature of an environmental benefit (16 C.F.R. § 260.7). In addition, the FTC requires that environmental marketing claims be substantiated by competent and reliable scientific evidence (16 C.F.R. § 260.5).

The Federal Trade Commission (FTC) has also developed the Green Guides, which help companies avoid deceiving consumers.

Furthermore, the Lanham Act (Section 43) — the primary federal U.S. law on trademarks and unfair competition — imposes civil liability for advertising that "misrepresents the nature, characteristics, qualities, or geographic origin of goods, services, or commercial activities."

Although this law does not directly relate to "environmental marketing," in some cases references to it can be an effective tool for companies seeking to curb unfair practices by competitors in this area. A company can sue a competitor if the competitor disseminates false information about its product or service that causes commercial harm. For example, if one firm claims its product is environmentally friendly but provides no evidence of this, another firm may file suit under the Lanham Act.

What happens to a company that engages in greenwashing? In the U.S., a court may order violators to pay compensation, cover damages, and stop the greenwashing practice.

In EU countries, companies can be held liable for greenwashing under the Unfair Commercial Practices Directive. Violations can result in fines and other sanctions if advertising misleads consumers regarding the environmental characteristics of products.

On October 22, 2024, the Federal Antimonopoly Service (FAS) published "Recommendations for Preventing Greenwashing in Marketing Communications," aimed at curbing the dissemination of unreliable (incomplete, inaccurate, or distorted) or incorrect environmental claims that mislead consumers about the environmental characteristics of goods.

In the Recommendations, FAS provides, for the first time, a definition of the term "environmental claim." It is defined as textual information and/or special symbols (eco-labeling) related to a product or service that indicate compliance with environmental standards or the presence of certain characteristics related to environmental impact. Such environmental claims may appear on product packaging, in product documentation, technical information, advertising, and digital or electronic media, including the internet.

In addition, according to the Recommendations:

In addition, liability for greenwashing in Russia is governed by laws on advertising and consumer protection. For example:

Additionally, in 2018, the law "On Organic Products" was adopted, establishing requirements for the production and labeling of such products. In particular, the production of organic goods must be isolated, must not use agrochemicals, pesticides, or antibiotics, and prohibits the use of consumer or transport packaging that would contaminate organic products.

Starting September 1, 2025, amendments to the "On Organic Products" law will take effect, prohibiting the labeling of products with the terms "organic," "green," "ecological," "biological," and their derivatives without a certificate confirming compliance with production requirements. Exceptions apply when "green" is used to denote color or ripeness (e.g., green bananas or green tea), or when the term "biological" is required by technical regulations.

Each country has its own standards. However, to mitigate the risk of liability for greenwashing, it is important to remember that an environmental claim made by a manufacturer, importer, distributor, or retailer must be clear, unambiguous, and — most importantly — verifiable.

Vague and overly broad wording should not be used, including phrases such as "environmentally safe," "environmentally clean," "environmentally friendly," "soil-friendly," "non-polluting," "green," "nature-friendly," "ozone-friendly," without further explanation.

Furthermore, "environmental" claims may not be made if they can only be verified using confidential information.

Environmental claims are made either as self-declarations or with confirmation via an appropriate certificate. The second method is safer and carries fewer risks. Among the most popular and internationally recognized certification systems are Ecolabel and Vegan Society. In Russia, the (currently only) equivalent labeling is "Leaf of Life" ("Листок жизни").

As we can see, the Federal Antimonopoly Service recognizes the existence of the greenwashing problem. The publication of FAS Recommendations specifically devoted to this topic indicates that FAS intends to monitor it closely and take action. Therefore, in the near future, we should expect the first inspections regarding false "green" claims by brands in Russia, followed by increased scrutiny of environmental claims by government agencies and courts.