What legal consequences can greenwashing have for companies?
Greenwashing is not only a reputational risk - it can also have legal consequences. More and more consumers, NGOs and supervisory authorities are taking action against misleading environmental advertising. Companies that only pretend to be sustainable risk warnings, fines and lawsuits, and this guide shows which laws are effective against greenwashing, what penalties can be imposed and how companies can protect themselves legally.
1. Warnings & injunctions
- Consumer protection organisations and competitors can issue warnings to companies.
- Companies must then withdraw false advertising and often sign a declaration to cease and desist.
Example: In 2022, True Fruits was warned about misleading sustainability claims.
2. Fines & penalties imposed by authorities
- The Green Claims Directive allows authorities to penalise greenwashing with high fines.
- In Germany, competition centres and the Federal Cartel Office can investigate misleading advertising.
Example: In France, H&M was fined €750,000 in 2023 because the ‘Conscious Collection’ was not sustainable.
3. Claims for damages & class actions
- Customers and investors can sue if they have been misled by false sustainability claims.
- In the USA, there have already been class action lawsuits against companies such as Nestlé and Coca-Cola.
- In the EU, new laws could make class actions against greenwashing easier.
4. Ban on advertising & recall of products
- Authorities can stop misleading advertising campaigns or remove products with false labels from the market.
Example: In the UK, Shell was forced to stop an advertising campaign in 2020 that overemphasised renewable energy, even though the company continued to invest heavily in fossil fuels.
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