What is greenwashing?
Greenwashing is a false or misleading environmental message. A true statement can also mislead when its headline, omitted facts, images, labels, or fine print create a greener overall impression than the evidence supports.
Greenwashing is not one legal test. Consumer law, financial-services rules, advertising codes and disclosure law can each apply, depending on the claim and its audience. Substantiation means holding credible, relevant and current evidence for the claim before you publish it.
Why does greenwashing matter to you?
Packaging, websites, tenders, sustainability reports and investor presentations can all be tested. Broad claims such as “green”, “sustainable” and “carbon neutral” may be understood as applying to the whole product or business. A comparison such as “30% lower carbon” needs a named starting point, the same method and product use on both sides, a current period and accessible evidence.
A disclaimer cannot rescue a misleading headline. A claim file is the dated wording, method, source data, assumptions, approvals and supporting documents behind a claim. A customer or regulator may ask to see it.
Which green-claims rules should you check?
In Australia, the ACCC guide sets out eight principles under the Australian Consumer Law. Claims should be accurate, evidence-backed, complete, properly qualified, specific, clear, visually honest and open about transition plans. For emissions claims, show which emissions the calculation includes and excludes, the reductions made, any carbon credits used to balance the remainder and proof that each credit was cancelled so it cannot be reused.
ASIC Information Sheet 271 addresses financial products and services. A fund or investment claim should be true to its label, explain the method and data limits and have reasonable grounds for future targets. Qualifications cannot correct a misleading headline.
In the UK, the CMA Green Claims Code says claims should be truthful, clear, complete, fairly compared, informed by the full product life from raw materials to disposal and substantiated. The Code is guidance on consumer law, not an approval or certification.
In the EU, Directive (EU) 2024/825 bans unsupported generic claims, whole-product claims based on one aspect and product climate claims based on offsetting. Member States had to adopt and publish national measures by 27 March 2026. They must apply those measures from 27 September 2026.
The separate Green Claims Directive proposal has not become law. On 18 August 2026, Parliament's procedure page showed that it was still waiting for the Council's position.
How should you test an environmental claim?
- Read the claim as a customer would, including its name, images, badges and nearby qualifications.
- Define the product, activity, geography, period and environmental impact covered.
- Match every factual statement to dated source data and a documented method.
- For a comparison, use products with the same purpose, one method, a named starting point and current information.
- For an offsets-based claim, separate gross emissions, direct reductions, remaining emissions and cancelled credits.
What mistakes should you avoid?
- Publishing first and assembling evidence after a customer or regulator asks.
- Using one packaging improvement to describe the whole product as sustainable.
- Changing the starting point or items covered between two products.
- Treating purchased credits as if the product released no emissions.
Is every broad environmental claim greenwashing?
No. The risk depends on the claim, its context, the overall impression and the evidence. A specific statement about one measured feature is usually easier to defend than an absolute claim about the whole product.
Can offsets make a carbon-neutral product claim defensible?
In Australia and the UK, the evidence and presentation must show what was measured, what was reduced, what remains and how credits were used. From 27 September 2026, the EU rule prohibits claiming that a product has a neutral, reduced or positive greenhouse gas impact when that claim is based on offsetting.