When a problem is likely to be resolved at some point in the future with no lasting harm, they say it will all come out in the wash.
Back in 1986, an ecologist on a research trip to Fiji reportedly coined the term “greenwashing” in an essay critiquing a beachfront resort’s towel reuse policy. Four decades later, greenwashed marketing claims, did not, it turns out, come out in the wash. They’ve permeated nearly every product category, from “carbon neutral” burgers and disposable cola bottles made with “plastic from the sea” to net-zero oil companies and ESG labels slapped on trillions of dollars in poorly regulated investment funds.
But the Wild West era may be coming to an end. As The Atlantic put it in March, “The world is finally cracking down on ‘greenwashing.’”
On May 11, the European Parliament voted to ban carbon-neutral claims that are based on carbon-offsetting schemes. At the same time, the U.K.’s Advertising Standards Authority also said it would begin stricter enforcement of “unqualified” carbon-neutral, nature-positive and net-zero claims; companies will now have to prove that offsets, which have come under heavy fire, are effective. Meanwhile, Gucci dropped the use of the term “carbon neutral” from its website this spring. EasyJet and JetBlue backed away from carbon offsetting schemes in December.
“Climate-related claims have been shown to be particularly prone to being unclear and ambiguous, misleading the consumer,” EU Environment Commissioner Virginijus Sinkevičius told The Guardian. “We need to set things straight for consumers and give them full information.”
In North America, both agencies in charge of overseeing marketing claims are retooling their approaches. For the first time in a decade, the U.S. Federal Trade Commission (FTC) is revamping its Green Guides, guidelines for environmental advertising and labelling claims. The FTC first published the Green Guides back in 1992 to “help marketers avoid making misleading environmental claims,” which had flourished.
The agency only issues greenwashing fines every few years. In 2022 the FTC went after Walmart and Kohl’s for deceptively marketing rayon bedding, clothing and towels as being “eco-friendly and “made from bamboo” (the U.S. Textile and Wool Act requires that they be labelled as “made with rayon,” since bamboo is converted to rayon using hazardous air-polluting chemicals). The companies agreed to pay the FTC US$3 and $2.5 million, respectively, in penalties. Now environmental and consumer groups want the agency to go after a wider array of claims, including plastic companies claiming that their “advanced” and “chemical” recycling methods are sustainable, as well as financial products purporting to be net-zero or “Paris aligned.”
“The explosive rise of the ESG investment space has raised new questions about what constitutes fair and faithful marketing and disclosure around financial products and services,” said Americans for Financial Reform in an April letter to the FTC.
Across the border, the federal Canadian government has launched a review of the Competition Act after it became clear that the Competition Bureau, like its American cousin, has been hamstrung by limited enforcement powers and funding. In the meantime, the regulator has been more active than ever on the greenwash file. After fining Keurig $3 million for misleading coffee-pod-recycling claims last year, the Competition Bureau is currently investigating the climate claims made by Canada’s largest bank (RBC), six largest oil companies (operating under their umbrella organization Pathways Alliance) and the Canadian Gas Association, as well as a greenwashing complaint against North America’s largest forestry certifier (Sustainable Forestry Initiative).
“The Canadian government should set standards and enforce against greenwashing, not only for the good of consumers and the planet, but also so our marketplace is not distorted by false or confusing green claims."
–Former environment minister Catherine McKenna
Still, agencies on both sides of the Atlantic have been accused of using a whack-a-mole approach to a widespread problem. While multiple studies have found that more than half of green claims are misleading, vague or unfounded, in Canada investigations are opened only after complaints are formally lodged by groups such as Ecojustice, Greenpeace and the Canadian Association of Physicians for the Environment.
The EU’s proposed Green Claims Directive would deliver a stricter framework, one that former Canadian environment minister Catherine McKenna wants Canada to emulate in tackling greenwashing “head on.”
“The Canadian government should set standards and enforce against greenwashing, not only for the good of consumers and the planet, but also so our marketplace is not distorted by false or confusing green claims,” McKenna said in a press release.
In the U.K., industry insiders are hopeful. One senior brand advisor told The Guardian that “the era of unspecific claims such as ‘environmentally friendly’ is over.”
Depending on how this year in regulatory overhauls shakes out around the globe, they may be right.
Adria Vasil is managing editor of Corporate Knights and the bestselling author of the Ecoholic book series.
