February 29th 2024
Greenwashing: The ten worst offenders, ranked by fine
88% of Gen-Z shoppers say that they now distrust ESG claims made by major brands and, with two-thirds of business leaders in the US admitting that their companies practiced greenwashing, you can understand why.
The problem has become so serious the EU have stepped in with a move to prevent companies making claims such ‘Environmentally Friendly’ without some proof to back it up or using sustainability labels not based on approved certification schemes.
CleanHub, a global startup that uses technology to prevent plastic from reaching the sea, have looked into previous greenwashing cases and ranked the top 10 worst offences, based on the size of the fine the company were hit with.
It’s no surprise that Volkswagen are run-away leaders, such was the scale of their deception when they deployed software in about 11 million cars mask the levels of emissions the cars created in real-world condition.
At number 4 is the only case in the list which relates to false claims about a product’s recyclability, in this instance coffee pods.
In 2022, H&M and Decathlon removed sustainable labeling from their stores and websites after the Netherlands Authority for Consumers and Markets found they had used terms such as ‘conscious choice’ and ‘ecodesign’ on their labels without sharing details to back up the environmental claims. A spokesperson for H&M said the company’s labeling ‘could have been clearer and more comprehensive.’
|
Company |
Fine |
Reason for fine |
| Volkswagen | $34.69 billion | Implementing software that falsified data and helped evade emissions tests on its vehicles |
| Toyota | $180 million | Delayed sharing of emissions-related reports |
| DWS | $25 million | Potentially marketing ESG funds as ‘greener’ than they actually were |
| Keurig | $12.2 million | Making misleading claims about its single-use coffee pods, suggesting they were recyclable when recyclers don’t widely accept them |
| Eni | $5.6 million | Claiming its palm oil diesel was ‘green’ |
| Kohl’s & Walmart | $5.5 million (combined) | Both claimed their products were made from environmentally friendly bamboo when they were made from other materials |
| Goldman Sachs | $4 million | Failing to follow ESG investment policies and misleading its customers |
| BNY Mellon | $1.5 million | Failures to implement ESG policies and overstating the ESG value of its funds |
| H&M & Decathlon | $430,500 and $530,000 | Making unsubstantiated claims on their labels |
CleanHub’s Vice President of Marketing, Nikki Stones, had this to say on the rankings: ‘Given how substantial these fines are, it’s clear that regulators are trying to send a message to companies. The days of quiet punishments are over when it comes to greenwashing — brands that intentionally mislead consumers over green initiatives will be severely penalised moving forward.
‘We expect to see more greenwashing fines in the coming years too, with new EU legislation on the horizon. To swerve these penalties, companies need to make sure all of their environmental claims and initiatives are transparent, truthful, and are backed up with evidence.’
CleanHub have provided a guide to ensure business can avoid greenwashing.