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May 4, 2024

Western Countries Reactions to Greenwashing

Government reactions to greenwashing in the US, EU, and Australia.

Western Countries Reactions to Greenwashing

What is Greenwashing?

Greenwashing is is the act of making false or misleading statements about the environmental benefits of a product or practice.

Examples of greenwashing includes:

  • overstating the eco-friendliness of products or services
  • hiding negative environmental impacts
  • using vague or misleading language
  • claiming to be on track to reduce emissions without an actual plan
  • using misleading  labels such as “green” or “eco-friendly” without standardized certifications
  • Emphasizing a single environmental attribute while ignoring other impacts

The US

In the US, the government provides resources to prevent greenwashing but enforcement is inconsistent. The FTC’s Green Guides apply to sustainability claims made by companies and are non-binding; but the FTC can take enforcement action if the claims violate federal laws about misleading consumers.

  1. Many private organizations have cited the Green Guides when suing companies over environmental claims, including greenwashing lawsuits against Nile, Kohl’s, and Walmart.
  2. The FTC has only taken enforcement action against greenwashing 8 times since 2018.

The EU

In the EU, the government is actively working towards curbing greenwashing. The Directive on Empowering Consumers for the Green Transition is legislation passed in January 2024 that bans exaggerated and unfounded sustainability claims from businesses. The EU has shown great leadership in combatting greenwashing and taking strong action against companies that try to manipulate consumers with false claims.

  1. The ban outlaws terms such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco” without substantial evidence.
  2. The ban extends to carbon offsets as they can no longer be used to justify claims of being “climate-neutral” or “climate-positive”.

Australia

In Australia, the government seems to sponsor greenwashing. A 2022 report finds that there are no credible policies or regulatory measures to sufficiently reduce carbon emissions, nor are there robust mechanisms to address misleading climate claims. It claims the powerful influence from corporate interests and financial benefits from serving the private sector hinders Australian policymaking in making sustainable change.

  1. The Australian Government has actively promoted carbon offsets, rather than mandating real emissions reductions, and continues to do so.
  2. The Australian Government also administers a carbon neutral ecolabel scheme, Climate Active, where corporations—including some of Australia’s biggest fossil fuel emitters—are ‘certified’ carbon neutral for offsetting some of their emissions and subsequently promoted by the Government as “progressive climate leaders”

References

https://www.nrdc.org/stories/what-greenwashing

https://australiainstitute.org.au/report/state-sponsored-greenwash/

https://www.theguardian.com/environment/2024/jan/17/eu-bans-misleading-environmental-claims-that-rely-on-offsetting#:~:text=Terms%20such%20as%20%E2%80%9Cclimate%20neutral,crackdown%20on%20misleading%20environmental%20claims.

https://www.theguardian.com/environment/2023/may/04/federal-trade-commission-industry-recycle-regulation