Greenwashing, the practice of companies making their products appear more environmentally friendly than they actually are, is evolving into increasingly complex and misleading practices.. To combat this growing corporate deception, government efforts and international regulations are being introduced.
Greenwashing is common in our daily lives, yet it is difficult to identify. At supermarkets, phrases like “naturally derived ingredients” or “carbon-neutral products” are commonly used. While these terms sound natural, few companies actually explain what they mean or why they should be considered as such. This practice of promoting an eco-friendly image without making genuine environmental efforts is referred to as greenwashing. With greenwashing becoming more sophisticated, it is essential to look beyond the green facade and understand the evolving mechanisms of greenwashing, along with the introduction of a new regulatory framework.
Image: Nestlé’s official sustainability webpage highlighting its "Nature and Environment" initiatives. (Source: Nestlé Global Website)
Common tactics used by companies
According to TerraChoice, greenwashing practices can be categorized into “seven sins of greenwashing”: concealing trade offs, unsubstantiated affiliation, vague terminology, irrelevance, fibbing, no proof, less of two evils. Among them, the most common tactic is concealing trade off. Companies promote the use of paper bags without mentioning the large-scale deforestation caused by their manufacturing process. Another practice by the companies is making unsubstantiated claims, such as stating that a product contains organic ingredients without providing third-party certification or a specific ingredient list. Companies often use vague terminology as well in order to increase their sales. When we walk down the laundry detergent aisle, words like “natural,” “eco-friendly,” and “green” that lack legal definitions are easily seen. In addition, there are cases of irrelevance where companies promote the absence of substances banned decades ago as if it were a major achievement, or the cases of fibbing or affixing non-existent eco-certification marks to products and including false information. An example of no proof tactic can be a detergent bottle labeled “eco-friendly” without any certification mark from an accredited organization. Internal combustion engine vehicles are an example of lesser of two evils, where the primary culprits of environmental pollution are marketed as eco-friendly simply because they have an “eco mode” feature. As a result, these tactics blur the line between genuinely sustainable products and misleading marketing.
More Sophisticated Greenwashing
Recently, there has been an increase in tactics that go beyond simple wordplay to involve the clever manipulation of data. A prime example is the “Net-Zero Trap.” According to the Corporate Climate Responsibility Monitor (CCRM) report by the NewClimate Institute, companies set ambitious goals such as “achieving carbon neutrality by 2050” while omitting annual reduction plans or feasible technical justifications. They point out that this is a tactic that effectively shirks current responsibilities by making promises for the distant future. Another tactic is “selective data disclosure.” Companies exclude supply chain emissions, which account for over 70% of their total carbon emissions, and instead only report electricity savings at their headquarters, presenting the entire operation as eco-friendly. In essence, they are hiding an uncomfortable truth behind flashy numbers. By exploiting data gaps and long-term commitments, companies are successfully greenwashing their high-carbon reputations without changing their core operations.
To counter these sophisticated tactics, governments and regulatory agencies around the world have begun to take serious action. On the technical front, “greenwashing detection solutions” have emerged, utilizing AI algorithms to compare companies’ advertising claims with actual emissions data in real time. These tools, which automatically identify loopholes in sustainability reports, have already become indispensable for investors. Significant changes have also occurred on the regulatory front. By 2026, publicly traded companies in the U.S. and Europe will be required to disclose environmental data with the same rigor as financial statements. Under these mandatory climate disclosure regulations, led by the U.S. Securities and Exchange Commission (SEC) and the International Sustainability Standards Board (ISSB), false disclosures will face the same legal penalties as financial fraud. The European Union (EU) has gone a step further with the “Green Claims Directive,” which requires companies to obtain prior approval of scientific evidence before using the term “eco-friendly.” These changes transform sustainability from a mere marketing option into a strict, legally binding financial obligation.
The End of Greenwashing?
Ultimately, the era of unchecked greenwashing is coming to an end. As corporate deception has evolved from simple wordplay to sophisticated data manipulation, it has triggered a strong response from both cutting-edge AI detection tools and strict global regulations such as the EU’s Green Claims Directive. However, policy and technology are only half the battle. True sustainability will be achieved only when consumers remain critically informed and hold companies accountable, and “eco-friendly” will become a genuine operational standard rather than an empty marketing slogan.
Work cited
“Action Against Greenwashing.” European Commission, 2024, environment.ec.europa.eu/topics/circular-economy-topics/green-claims_en. Accessed 8 June 2026.
“Corporate Climate Responsibility Monitor.” NewClimate Institute, 2024, newclimate.org/what-we-do/projects/corporate-climate-responsibility-monitor-ccrm. Accessed 8 June 2026.
“EU Green Claims Directive / Green Transition Directive.” My Green Lab, mygreenlab.org/resources/eu-green-transition-directive/. Accessed 8 June 2026.
“SEC Adopts Rules to Enhance and Standardize Climate-Related Disclosures for Investors.” U.S. Securities and Exchange Commission, 6 Mar. 2024, www.sec.gov/newsroom/press-releases/2024-31. Accessed 8 June 2026.
“The Seven Sins of Greenwashing.” TerraChoice, terrachoice.com/the-seven-sins-of-greenwashing/. Accessed 8 June 2026.
“The Sins of Greenwashing.” UL Solutions, www.ul.com/insights/sins-greenwashing. Accessed 8 June 2026.
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