Greenwashing: A Form of Consumer Deception

Greenwashing is a marketing strategy that deceives or misleads consumers about a company’s sustainable practices or the environmental benefits of a particular good or service. This occurs when companies use terms like “100% sustainable,” “green,” “eco-friendly,” or “100% renewable” on their trademarks, branding, packaging, containers, or advertisements without having concrete environmental actions to substantiate those claims.

Why can it be problematic?

This type of strategy can be problematic for a myriad of reasons. Some of these are the following:

1. Failure to provide accurate information:

Consumers do not receive clear, truthful, timely, and verifiable information about the characteristics and qualities of the goods or services being offered.

2. Misleading advertising:

It conveys a message that does not correspond to reality and leads to consumer error, deception, or confusion.

3. Damage to trademark reputation:

It includes suggestive expressions of the trademark´s environmental commitment that are not backed by concrete actions, which can negatively impact consumer loyalty and positioning of the sign.

4. Risks to biodiversity conservation and human health:

In the food sector, unsupported expressions such as “CO2 neutral” or “climate positive” have started to be used. Similarly, a new generation of modified organisms is being advertised as sustainable or environmentally friendly, without full information on the potential risks these new transgenic products may have on the environment.

How has greenwashing been regulated in different jurisdictions?

Different jurisdictions have approached greenwashing in their own way. For example, in the United States, particularly in California, the “Anti-Greenwashing Law” was implemented. On the other hand, the European Union formalized the creation of a “Green Claims” commission aimed at improving consumer protection against unfair practices and ensuring transparent information.

In Colombia, the Decree 1369 of 2014 was issued to regulate the use of advertising related to the environmental qualities, characteristics, or attributes of products. Currently, this Decree is being considered for elevation to law through Bill No. 015 of 2022, seeking to sanction greenwashing. Additionally, INVIMA, through the Directorate of Food and Beverages and its Group of the Risk Analysis System for Chemicals in Food and Beverages, has been formulating, executing, monitoring, and evaluating plans and programs aimed at detecting unauthorized GMOs in food.

Have companies been sanctioned for “greenwashing”?

Globally, authorities have recently acted against greenwashing. On March 20, the Amsterdam District Court found KLM guilty of using unfounded claims in its “Fly Responsibly” advertising campaign. While the ruling did not impose a monetary penalty, it did call on the airline to be more precise and transparent about its environmental communications.

Similarly, the European Commission and Consumer Protection Authorities of Norway, the Netherlands, and Spain have sent letters to twenty airlines for allegedly misleading claims such as “sustainable aviation fuels,” “sustainable”, and “responsible”, as well as claims about CO2 emissions from flights without sufficient evidence to support them. Authorities invited the airlines to propose measures regarding the environmental claims within 30 days.

This practice seems to be common among many companies, however it is important to understand the risks it may have and the problems it might bring to the company. The regulatory framework that has emerged, along with the different sanctions that have been imposed, highlights the current popularity of this controversial and risky practice.