European Directive 2024/825 aims to “give consumers the means to participate in the ecological transition, by offering them better protection against unfair commercial practices and better information”, as its title indicates. Although this regulation will not come into force until 2026, growing social concern over the so-called English term greenwashing has led companies to take more care of their communication in order not to be accused of ecopostureo and condemned for it. This is evidenced by various studies carried out, including the 2024 Transparency Index of Connected impact And Ringing Sciences.
The report states that after reviewing more than 600,000 notifications from the top 100 UK and 100 US companies, only 5% of environmental claims were unsubstantiated and could therefore be classified as greenwashing. In the same spirit, another recent study by RepRisk recorded a drop of 12% between July 2023 and July 2024 at the global level, which represents the first contrasting decline in this phenomenon since the start of its monitoring in 2019. This study reveals Furthermore, the effects of the directive seem self-evident, with a reduction in cases of 20%.
However, the extreme negative is also increasing and forces us not to let our guard down: the aforementioned RepRisk report warns that there is a 32% increase in cases of greenwashing high severity, those that involve deliberate actions to hide violations of environmental, social and governance standards, so-called ESG criteria. Although they continue to represent less than 8% of the total recorded cases, their increase constitutes a major concern for the authorities.
Improving resources to combat “greenwashing”
The deadline for Member States to adopt and publish the provisions necessary to comply with the regulations expires in March 2026, while it will be from September 27 of the same year when it enters into force in the European Union. From now on, any misleading, inaccurate or exaggerated environmental declaration in communications to consumers will be punished. To prevent this from happening, the law clearly defines how companies must communicate, for example avoiding the use of imprecise terms such as biological origin either environmentally friendly without providing verifiable and concrete evidence to justify such statements.
In this sense, the European Securities and Markets Authority (ESMA) recently presented its thoughts in response to the request from the European Commission on risk management of greenwashing and monitoring sustainable financing policies. The body warns in its report that, despite the regulatory framework, the supervisory authorities of each Member State note limits in their ability to identify and act accordingly. ecopostureo due to lack of clear signals, lack of experience or limited access to quality data. As a recipe, ESMA proposes to improve human resources, adapt organizational supervisory structures linked to sustainability, invest in data and technological tools, integrate the risks of greenwashing in risk monitoring and deepen critical thinking.
At the same time, the EU’s main partners are also promoting similar measures. This is the case of the United Kingdom and its Green Claims Code. This text establishes guidelines to avoid false claims regarding the environmental impact of products and services. Although it does not have the force of law, there is an organization in the country that can issue orders to modify or withdraw campaigns that do not meet the standards of said code. This is the Advertising Standards Authority (ASA).
So far, 230 disputes have been reported in this country since 2015 – 47 new cases have been filed in 2023 alone – according to the Grantham Research Institute of London School of Economicswith almost half of the cases resolved in favor of the complainant. In this sense, analysts point out that this situation represents a significant change, since traditionally accusations in the United Kingdom have focused on governments and public administration.
Finally, the data also reveals that the movement against eco-money laundering also had an unexpected guest: the effect of social pressure and future legislation is such that some analysts are already talking about the opposite effect or greenery. That is to say, there is a certain tendency on the part of companies that are making progress in sustainability to avoid promoting it, for fear of being accused of money laundering. Its impact would reach, according to the FTSE100 index, 63% of the organizations that are part of its list and 67% of North American companies, which would not publicly disclose their improvements in terms of sustainability.
