Unpacking Greenwashing: Can We Really Stop It?

Summary:

Greenwashing, a term used since the 1980s, has become ever more prevalent today. This phenomenon fuels ‘green confusion’ and erodes consumer trust and stalls genuine sustainability progress. By enforcing stronger eco label laws and adopting globally unified ESG standards we can restructure the counterfeit ecological image of the corporate world and - above all - help the fight against climate change.

Introduction

Greenwashing: “behaviour or activities that make people believe that a company is doing more to protect the environment than it really is”

Although the term has been in use since the 1980s, greenwashing’s prevalence has increased significantly in recent decades. Amid the growing climate crisis, tackling greenwashing is essential as it reduces both stakeholder and consumer trust , while obstructing genuine environmental progress. This article analyses the various forms of greenwashing, evaluates their impacts, and explores strategies to address the issue, with particular attention to the role of standardised legislation in mitigating future risks.

The Ways Greenwashing Can Occur

Figure 1. Summary of the two main ways greenwashing occurs; selective disclosure and decoupling behaviour by companies

The impacts of greenwashing 

1. On consumers

Since the rise of environmental movements in the 1990s, consumer behaviour has evolved significantly. Today, more people consciously choose sustainable products, recognising their purchasing power as a force for positive change. In response, businesses have embraced green marketing strategies to stay relevant and competitive in an increasingly eco-conscious market. This shift is reflected in recent 2024 data, which showed sustainably marketed products increased their market share by 2.6 percentage points compared to the previous year.

However, the rise of green marketing has also brought an increase in greenwashing, leading to what is called “green confusion”. A situation in which vague or misleading eco-labels make it hard for consumers to tell which products are truly sustainable. Additionally, when businesses are exposed for greenwashing, it harms their reputation and breeds distrust, leaving consumers skeptical and less likely to buy green products again. A 2025 study by Pattnayak highlights this: it shows a statistically significant correlation between consumer activity and loss of trust in brands which greenwash.

2. On businesses

Unfortunately, greenwashing has spillover effects that impact both stakeholders and honest businesses. It often leads stakeholders to question the sustainability claims of all companies, while also damaging the reputation of genuine businesses within the industry.

The practice may be beneficial short-term as businesses could experience increased profits before being exposed for greenwashing. By misleading consumers into believing their products are sustainable, their sales can be boosted. Furthermore, if their greenwashing goes unnoticed, they face less pressure to improve their environmental practices, allowing the deception to continue.

In contrast, a study found statistically significant differences in stakeholder perceptions of corporate environmental responsibility. Interestingly, companies exposed for greenwashing were perceived by stakeholders as having greater environmental responsibility afterward. This shift in perception could have a positive effect by increasing accountability and encouraging more sustainable behaviour from these businesses in the future.

2. On the environment

Greenwashing not only undermines genuine environmental action but also creates a significant barrier to achieving sustainability. A key example is its impact on Sustainable Development Goal (SDG) 12, which seeks to “ensure sustainable consumption and production patterns”. This goal highlights the need for businesses to reduce waste, use resources responsibly, and pursue economic growth without harming the planet.

When businesses engage in greenwashing, they mask poor environmental performance with misleading claims, gaining economic advantage as consumers are misled into buying their products. This not only perpetuates unsustainable consumption but also incentivises further deception. Over time, such practices worsen environmental harm by encouraging the continued use of polluting processes and unsustainable resources. In addition, other companies may copy these strategies if they see them as profitable, amplifying the negative environmental impacts. Various case studies demonstrate how these deceptive practices undermine progress toward sustainability.

Solutions 

1. Enhancing legislation for eco-labels and green marks 

Currently, the use of green marks is largely self-regulated, allowing businesses to label products as environmentally friendly without necessarily taking meaningful action. This can create consumer distrust and undermine the credibility of environmental claim. While eco-labels like the Forest Stewardship Council (FSC) certification are generally more reliable due to third-party verification and regular audits, having a label does not guarantee full environmental sustainability. For example, IKEA’s FSC-certified products were allegedly found to contain illegally sourced wood, highlighting how issues could persist due to unstandardised eco-labeling. In order to limit these occurrences, it is crucial to enforce stricter legislation before products are granted a green mark or eco-label. This can be achieved by thoroughly assessing a product’s lifecycle environmental impact and

establishing clear, standardised guidelines that businesses must follow to obtain certification.

2. Implementing standardised environmental, social and governance (ESG) frameworks at the corporate level

A key strategy to combat greenwashing is the adoption of ESG frameworks within companies, as these promote greater transparency, accountability, and sustainable business practices. ESG frameworks encourage the systematic monitoring of environmental and social actions, helping ensure that corporate operations are aligned with sustainability goals. However, despite the growth of ESG regulation over the past decade, inconsistent global standards and varied reporting practices have often undermined their effectiveness. Companies frequently use different metrics or selectively report favourable data, making it difficult to compare performance and verify claims. To fully harness the potential of ESG, globally consistent standards should be established, with explicit requirements for what should be monitored and reported. Such standardisation would enhance credibility, improve comparability, and make ESG a powerful tool in limiting greenwashing across industries.

Conclusion

Greenwashing is a growing concern that can take many forms, from exaggerated claims to subtle misrepresentations, yet research on the topic remains surprisingly limited. One of the biggest challenges is the lack of a comprehensive and widely accepted definition. Without this, it is difficult to tackle the issue consistently. Moving forward, it is crucial to implement more standardised regulations and clear guidelines at all levels. By reducing the grey areas, these measures will make it easier for both consumers and stakeholders to identify potential greenwashing, encouraging greater transparency and accountability in corporate sustainability practices. Ultimately, addressing greenwashing is not just about policing claims, it’s about fostering a culture of honesty and genuine environmental responsibility. By achieving this, we will take a meaningful step towards a sustainable future. 

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