The Rise of Greenwashing Disputes – Emerging Trends

This blog was originally posted on 16th April, 2025. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY EMILIA ASSENZA, SENIOR REGULATORY COMPLIANCE SPECIALIST, COMPLIANCE & RISKS

Introduction

An increased number of new regulations is being enacted across the globe as legislators intensify their fight against greenwashing. Fuelled by a surge of consumer awareness towards sustainability, companies are now expected to be transparent about their environmental commitments, through all kinds of communications – advertising, product labels, company websites, corporate reporting and more.

To date, many countries have already put in place a system to combat greenwashing, which may consist of different types of regulations – existing consumer protection legislation, ad hoc provisions on green claims, sustainability reporting rules etc. – that require environmental and sustainability information to be accurate, clear and not misleading or deceptive. In parallel, enforcement methods have been established to ensure compliance with these provisions.

Any type of communication or statement regarding the environmental/sustainability aspects of a company or their products is now under scrutiny by national authorities. As a result, government enforcement and lawsuits have significantly increased in the last few years. 

Here are some of the emerging trends regarding greenwashing claims.

Increased powers to authorities

In the UK, the Competition and Markets Authority (CMA) has been given new enforcement powers under the Digital Markets, Competition and Consumers Act. CMA will now be able to decide whether consumer protection laws have been infringed (rather than litigating through the courts) and to issue fines. 

While the Act does not explicitly target greenwashing, it is very likely that CMA will use these powers to issue fines for misleading/deceptive green claims, as already happened in the past. For example, CMA has previously urged fashion retailers “to use only accurate and clear green claims”.

Under the Act, CMA can impose fines up to 10% of global annual turnover of companies in breach of consumer protection laws (including the Green Claims Code).

Recent disputes

• A German court found a leading sportswear manufacturer guilty for not providing sufficient information on their climate neutrality claim which stated that the company would become “climate neutral by 2050”. The court found that the company failed to clearly explain how climate neutrality should be achieved. As a consequence of this ruling, the company was no longer allowed to advertise such a goal without clear explanation as to how it plans to achieve this target.

• In California, a US giant tech company is facing a lawsuit for alleged misleading carbon neutral claims due to the fact that they were based on two carbon offsetting projects which did not result in genuine carbon reductions. 

• In Italy, a fast fashion brand is under investigation by the antitrust authority for potentially misleading environmental claims, published on its website, in violation of the consumer protection law regarding the percentage of green fibers used in garments and product recyclability.

Key takeaways

It is likely that governments’ actions against greenwashing will continue to grow, by means of new regulations, enforcement and sanctions. This translates into major legal challenges for companies, who must be ready and take action to ensure that their environmental claims are sufficiently substantiated and verified. Non-compliance could in fact expose companies to escalated risks and additional costs, as well as reputational damage.

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