7 Notable Examples of Greenwashing in Corporate Sustainability

Greenwashing has become a major issue as companies face growing scrutiny over their environmental claims. Many organizations promote sustainability to attract environmentally conscious consumers. However, some companies make exaggerated or false claims, known as greenwashing. These actions damage trust, lead to reputational damage, and may result in legal penalties. Here, we explore seven of the biggest examples of greenwashing involving major brands like FIFA, Deutsche Bank, Keurig, and Volkswagen.

What is Greenwashing?

Greenwashing is when companies mislead consumers about the environmental benefits of their products or practices. This can be done intentionally or unintentionally, but in either case, it often results in damaged trust and financial penalties. As consumer demand for environmentally responsible products grows, so does the scrutiny on businesses to ensure that their sustainability claims are genuine and accurate.

As highlighted by these 7 major examples of greenwashing:

1. FIFA: Carbon-Neutral Claims for the 2022 World Cup

FIFA claimed the 2022 World Cup would be carbon-neutral, offsetting all event emissions. However, climate activists and organizations such as Carbon Market Watch challenged this claim. They argued that FIFA underestimated emissions and lacked reliable carbon offsets. In 2023, the Swiss Fairness Commission ruled against FIFA’s claims. This case shows the risks of loosely using terms like “carbon-neutral” without concrete evidence.

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“Vague definitions around terms like carbon-neutral can cause confusion,” noted Thomas Husson, an analyst at Forrester Research. Regulatory directives, like the EU’s Corporate Sustainability Reporting Directive, are starting to address these ambiguities by demanding evidence to support sustainability claims.

2. Deutsche Bank’s DWS: Misleading Green Investment Claims

In 2021, Deutsche Bank’s asset management arm, DWS, faced allegations that it overstated its use of sustainability criteria in investments. Following whistleblower claims, the U.S. SEC and German regulator BaFin investigated, leading to raids on DWS offices. In 2023, DWS settled with the SEC, agreeing to pay $25 million for greenwashing and anti-money laundering violations. This case illustrates how overstating green investment practices can result in financial penalties and reputational damage.

“The reputational risk from greenwashing is often bigger than financial penalties,” Husson commented.

3. Keurig: Misleading Recycling Claims

Keurig advertised its K-cup coffee pods as recyclable in 2016, despite limitations in recycling facilities that could process them. This led to class-action lawsuits and greenwashing penalties. The company eventually paid $10 million in a U.S. settlement, $2.3 million to Canada’s Competition Bureau, and $1.5 million to the SEC in 2024. The penalties highlight the importance of aligning recycling claims with actual recycling infrastructure.

4. Ikea: Sourcing from Questionable Suppliers

Ikea has led many sustainability initiatives but faced accusations in 2021 when the nonprofit Earthsight alleged the company sold FSC-certified wood illegally sourced from Russia. Ikea ended relationships with implicated suppliers, though the case underscored the challenges in verifying sustainable sourcing, especially in complex supply chains.

“Even sustainable brands struggle to monitor their entire value chain,” Husson observed, noting that some companies are implementing audits to avoid similar pitfalls.

5. Kohl’s and Walmart: Misleading Bamboo Claims

In 2022, the FTC charged Kohl’s and Walmart for falsely advertising rayon products as bamboo. The FTC ruled that producing rayon requires chemicals that disqualify it as “eco-friendly.” Both companies settled, with Kohl’s paying $2.5 million and Walmart $3 million. This case serves as a cautionary tale for brands promoting “natural” claims without supporting evidence.

6. H&M: Misleading Sustainability Scores

H&M faced scrutiny in 2022 when a Quartz investigation revealed inaccuracies in the brand’s Conscious Choice scorecards, which used the Higg Sustainability Profile metric. Some scorecards overstated environmental benefits, damaging H&M’s credibility among consumers. The incident reveals the risk in relying on third-party metrics and the importance of accuracy in communicating sustainability data.

According to Husson, misleading metrics have contributed to rising skepticism toward corporate sustainability claims. Consumers expect brands to back their green claims with verifiable facts.

7. Volkswagen: Emission Testing Scandal

Volkswagen’s greenwashing case is one of the most well-known. In 2015, the EPA discovered that Volkswagen used software to cheat emissions tests, allowing vehicles to emit up to 40 times the legal nitrogen oxide levels. Volkswagen eventually faced over $30 billion in fines globally. This case underscores the severe financial and reputational consequences of deceptive environmental practices.

Lessons to Avoid Greenwashing

To avoid greenwashing, companies should foster open communication between sustainability and marketing teams. This can prevent unintentional miscommunication in sustainability claims. Additionally, companies can move from “storytelling” to “storymaking,” encouraging consumers to participate in sustainability efforts.

“Greenwashing often results from miscommunication rather than intentional deceit,” Husson noted. Brands can learn from Patagonia’s Worn Wear initiative, which invites customers to repair and resell clothing, empowering them to live sustainably.

Table: Greenwashing Cases and Outcomes

Greenwashing can harm brand reputation and result in costly penalties. As awareness grows, companies are urged to prioritize transparency in sustainable marketing practices.