For the third consecutive year, RepRisk’s report on greenwashing highlights trends in the number of companies linked to misleading the public about their environmental impact. While the 2024 data shows an overall decrease in greenwashing cases for the first time in six years, high-risk cases of greenwashing surged by over 30%.
# I. Introduction
Over the past years, we have seen a significant increase in interest from clients, partners, researchers, and regulators regarding the identification and measurement of greenwashing risk. Building on our previous year’s analysis, we now revisit the landscape to examine how it has evolved with the latest ESG risk incident data.1
In last year's report, we expanded our focus to include social washing alongside greenwashing. This year, we will concentrate on the regulatory developments in this area, providing insights into how these changes are shaping the greenwashing landscape.2
Greenwashing is the practice of making unsubstantiated, untrue, or misleading claims about the environmental benefits of a company's products and initiatives to attract customers and investors who prioritize sustainability. Through such claims, companies hope to appear more environmentally friendly than they actually are, even when their actions do not align with the environmental standards they promote.
RepRisk captures greenwashing through the intersection of two ESG issue groups: any environmental issue and Misleading communication.3 This approach captures straightforward greenwashing cases such as deceptive labeling and more complex situations like political misalignment.
The relationship between a company’s rhetoric and practice carries substantial reputational risks. As regulations on greenwashing practices become more stringent, and as consumers and investors increasingly pursue legal action for misleading environmental claims, the issue is becoming more pronounced. The rise in lawsuits, investigations and enforcement actions, driven by the tangible environmental impacts of corporate operations, reflects the growing momentum to address greenwashing.
# II. RepRisk’s annual greenwashing reports: key take-aways from the past three years
| 2022 | 2023 | 2024 |
|---|---|---|
▪ Over the past ten years (2012 – 2022), greenwashing incidents increased across various sectors and regions, especially in Europe and the Americas. |
▪ One in every four climate-related ESG risk incidents was tied to greenwashing, which is a 25% increase from 2022. |
▪ Despite an overall 12% decline in greenwashing cases, high-risk incidents surged by over 30% in 2023-2024. |
▪ Between 2020 and 2022, 20% of climate-related ESG risk incidents were tied to greenwashing. This percentage rises to 33% when focusing on the Food and Beverage sector. |
▪ The Banking and Financial Services sector saw a 70% increase in the number of climate-related greenwashing incidents compared to 2022. |
▪ Nearly 30% of companies linked to greenwashing in 2022-2023 were repeat offenders in 2024. |
▪ A review of carbon offsetting programs over the past five years highlights the presence of ESG risks, including issues like fraud and community displacement tied to offsetting initiatives such as tree planting. |
▪ Nearly one in three public companies linked to greenwashing were also accused of social washing. |
▪ In the EU’s Banking and Financial Services sector, climate-related greenwashing incidents declined by 20% in 2024, a likely consequence of stricter regulations. |
# III. Companies in Europe and North America under continuing scrutiny
Over the past year, 1,841 incidents of Misleading communication were recorded, of which 1,038 (56%) were also linked to environmental issues – which constitutes greenwashing when both issues are present. Of the 3,868 companies connected to Misleading communication, 2,213 (57%) were linked to environmental issues as well.4 Private companies represent a significant portion of greenwashing cases: 70% of the companies associated with greenwashing were private, compared to 30% that were public.
As in the past six years, greenwashing incidents continue to be highest in Europe and North America, followed by Asia and Latin America and the Caribbean. Incidents remain highest in Europe, despite the significant drop in 2024 highlighted further below.
# Greenwashing risk sees a slight decline in most regions
Figure 1: Reflects the count of companies with at least one ESG risk incident linked to both environmental footprint and Misleading communication in a given year.
# IV. Greenwashing severity and repeat offences increase by 30%
Compared to RepRisk’s 2023 data, the severity of cases associated with greenwashing has surged by 30% year-over-year (YOY). RepRisk determines severity as a function of three dimensions: the consequences of the risk incident; the extent of its impact; and the degree to which the incident was intentional and systematic.5 Greenwashing incidents with high severity ratings usually display purposeful and systematic actions to conceal ESG violations resulting in material consequences for the environment, such as heavy pollution, and/or for the company, such as fines.
# Low-severity greenwashing incidents decline, high-severity incidents rise
Figure 2: Reflects the change in global greenwashing incidents by severity.
According to RepRisk’s global data, 30% of all companies linked to greenwashing in 2023 were also flagged in 2024.
# Low-severity cases decrease by 20% while high-severity cases surge by 30% in 2024
Figure 2: Reflects the change in global greenwashing incidents by severity.
For the year ending in June 2024, greenwashing trends have shifted across major global markets, with varied patterns emerging in different regions. While the United States has seen a modest reversal of its prior downward trend, the EU has experienced a notable decline in the frequency of greenwashing incidents.
# Greenwashing shift in major markets: A closer look at US, UK, and EU
Figure 3: Reflects the count of companies with at least one ESG risk incident linked to both environmental footprint and Misleading communication in a given year.
# V. The US slightly reverses last year’s trend
In 2024, we’ve seen a slight increase in companies linked to greenwashing in the US, with a YOY increase of just under 6%. This reverses last year’s trend, which saw a decrease of just over 10% of greenwashing incidents in the US.
The YOY increase in US companies associated with greenwashing contrasts with the overall global drop in greenwashing incidents, with countries like the UK, Netherlands, Germany, Spain and China all reporting annual decreases.
High severity incidents of greenwashing in the US mirror the global trend – they are up by a remarkable 114% in 2024 compared to 2023. Conversely, low-severity cases decreased by almost 34% and medium-severity cases fell by over 15%.
The US Banking and Financial Services sector saw an 18% decline in greenwashing incidents this year, a much steeper drop than the 1% decrease recorded in 2023, and a stark reversal from the 90% surge between 2021 and 2022.
Meanwhile, the repeat offender rate for US companies engaging in greenwashing stands at 42% in 2024, which is significantly higher than the global average of nearly 30%.
# Nearly 30% of all companies globally linked to greenwashing in 2023 were also flagged in 2024
Figure 4: Global count of companies across all sectors linked to greenwashing in 2023, 2024, and both years
# VI. Modest decrease in greenwashing cases in the UK
In the past twelve months, greenwashing incidents in the UK have seen a slight drop, with a YOY decrease of nearly 4%. Nonetheless, this still marks a 179% rise from 2018 levels.
Despite the recent decline, the number of greenwashing cases in the UK remains higher than in countries such as Australia, Brazil and China, with only the US, the EU, and Germany surpassing the UK among the 13 major markets studied.
High-severity greenwashing incidents in the UK align with global trends, rising by more than 21% in 2024 compared to 2023, while low-severity cases have dropped by almost 30%.
The number of companies linked to greenwashing in the UK’s Banking and Financial Services sector has remained unchanged this year compared to last, yet it still represents an almost 67% increase from 2022.
Additionally, the repeat offender rate for UK companies involved in greenwashing is just over 21% in 2024, compared to the previous year.
# VII. Decline in greenwashing in the EU offset by rising high-severity incidents
In 2024, the EU saw a decline in greenwashing cases of just over 20%. However, this reduction must be viewed in the context of a sharp rise in previous years: cases increased by 42% from 2022 to 2023 and by 85% from 2021 to 2022.
The drop in greenwashing cases is not uniform across EU member states. The Netherlands experienced the largest reduction, with cases falling by 48%, followed by Italy at 39% and Spain at 28%. Germany, on the other hand, saw a below-average decline of just over 15%. France diverged from this trend, seeing an increase in greenwashing cases of nearly 11%. This rise is partially linked to the 2024 Paris Olympics, which drew attention from environmental activists, particularly regarding greenhouse gas emissions and air travel associated with the event.
# Overall increase in greenwashing risk, with a slight decline in 2024 across most countries
Figure 5: Reflects the count of companies with at least one ESG risk incident linked to both environmental footprint and Misleading communication in a given year.
It is important to note that the overall decline in cases is confined to those classified as low to medium severity. In contrast, high-severity greenwashing incidents in the EU rose by 27% in 2024. While this is a significant increase, it is much smaller compared to the 131% increase in 2023 and the 220% rise in 2022.
The repeat offender rate for EU companies engaging in greenwashing stands at 39% in 2024, considerably higher than the global average of nearly 30%.
# VIII. Oil and Gas sector most frequently associated with greenwashing
A sectoral breakdown reveals varying trends in greenwashing cases across industries. In 2024, the Oil and Gas sector accounted for the largest share of greenwashing cases, followed by Food and Beverage, and Banking and Financial Services. In terms of YOY change, the Banking and Financial Services sector saw the largest decline, with a drop of almost 27%, followed closely by Retail, Personal, and Household Goods, which decreased by over 25%. Conversely, the Food and Beverage sector experienced the smallest YOY decline, with only a 3% reduction.
# Shifting breakdown of sectors linked to greenwashing
Figure 6: Distribution of greenwashing risk incidents across 9 sectors from 2019 to 2024
As with previous years, the Oil and Gas sector remains a significant contributor to greenwashing cases. Even as the sector has seen a 6% reduction in the overall number of greenwashing incidents in the current reporting period, recent high-profile cases show that misleading environmental claims remain a notable issue in the industry.
In South Africa, the Advertising Regulatory Board (ARB) determined that French oil company TotalEnergies's claims of being "committed to sustainable development and environmental protection" were misleading. The ARB found that while TotalEnergies had engaged in sustainable projects, the company’s core business in fossil fuel production contradicted its claims of environmental protection and sustainable development.6
In April 2024, meanwhile, German prosecutors launched an investigation into Wintershall Dea GmbH for misrepresenting its 2022 sustainability reporting. The criminal complaint alleges that the company violated its reporting duties by either misrepresenting or omitting required information related to the company’s environmental and climate impact.7
In June 2024, the California Attorney General filed an amended complaint in an ongoing lawsuit against Exxon Mobil, Shell, Chevron, ConocoPhillips, BP and the American Petroleum Institute. The original lawsuit, filed earlier, claimed that the companies were aware since the 1960s of the harmful effects of fossil fuel combustion on the climate but still denied or downplayed this knowledge in their public statements. The amended complaint presents new evidence of false advertising and greenwashing, and aims to compel the companies to forfeit profits gained from these alleged practices.8
# IX. Banking and Financial Services sector sees a 20% global drop in climate-related greenwashing
The Banking and Financial Services sector continues to be vulnerable to greenwashing allegations and fines due to its role in financing industries with significant environmental impacts. Financial institutions often market themselves as leaders in ESG investing but face scrutiny for failing to align these claims with their actual practices. Two recent cases from the US and Australia underscore growing regulatory scrutiny in this regard.
In 2023, Deutsche Bank-backed investment firm DWS agreed to pay a $25 million settlement to the US Securities and Exchange Commission (SEC) over allegations of greenwashing. The SEC accused DWS of making misleading statements about its integration of ESG factors in its investment practices between 2018 and 2021. DWS had promoted itself as an ESG leader, but investigators found that the firm did not fully implement the ESG policies it had promised to investors.9
In September 2024, Australia’s federal court imposed a landmark fine of AUD 12.9 million against Vanguard Investment Australia, a subsidiary of US-based Vanguard Group, for greenwashing practices. The investment management firm was found guilty of making misleading statements about the ESG criteria applied to its Ethically Conscious Global Aggregate Bond Index Fund. While the fund claimed to exclude companies involved in industries such as fossil fuels and firearms, some companies were included despite not meeting expected ethical standards. The Australian federal court ruled that the misleading claims, which appeared in product disclosures, a media release, online content and interviews, could have influenced consumers' decisions on ethical investments.10
Overall, the latest RepRisk data signals a significant shift in greenwashing trends within the Banking and Financial Services sector. While the sector experienced a 70% increase in climate-related greenwashing from 2022 to 2023 – a trend also reflected in a report from the European Banking Authority published this summer – new RepRisk data reveals a 20% decrease in incidents globally across the sector in 2024. Impacts on landscapes, ecosystems and biodiversity was the second most-cited RepRisk Issue linked to greenwashing in the Banking and Financial Services sector, though this category also experienced a significant 42% decline compared to 2023. Just over a third (36%) of financial companies linked to greenwashing in 2023 were also linked to greenwashing in 2024, which is slightly above the 30% average across all sectors.
# Environmental issues linked to greenwashing in the Banking and Financial Services sector
Figure 7: Reflects the count of environmental issues linked to greenwashing in the Banking and Financial Services sector, categorized by issue type and reported number of incidents in the corresponding year.
# X. Food and Beverage under rising scrutiny
Consumer-facing sectors, such as Food and Beverage, equally have been facing increased regulatory scrutiny over ESG claims, exemplified by a recent case brought against Coca-Cola in the US. In August 2024, the District of Columbia Court of Appeals ruled that Coca-Cola must face a lawsuit brought by the environmental nonprofit Earth Island Institute, which alleges the company misrepresented its sustainability efforts in violation of the Consumer Protection Procedures Act. The central claim is that Coca-Cola markets its plastic bottles as "100% recyclable," while a significant portion of these bottles allegedly end up in landfills or incinerators due to inadequate recycling systems.11
# XI. Airlines face heightened regulatory action
The risk of greenwashing has increased in the European airline sector, driven in part by the introduction of new regulations. These rules require companies to not only report on their environmental impacts and commitments but also ensure that such claims are accurate, scientifically substantiated, regularly updated, and clearly communicated to both consumers and investors.
Incidents from 2023 and 2024 highlight several cases where European governments took legal action against airlines for misleading environmental claims, particularly regarding carbon emission reduction efforts through carbon offsetting or the transition to renewable aviation fuels.12
For example, in September 2023, an Austrian court prohibited Austrian Airlines from advertising carbon-neutral flights after an NGO successfully sued the company for misleading environmental statements.13 In March 2024, the Amsterdam District Court found that KLM misled consumers with several environmental claims, ruling that 15 out of 19 statements assessed were misleading. The court concluded that KLM's advertising, including claims about moving toward a "more sustainable" future and the benefits of sustainable aviation fuels and carbon offsetting, presented an overly positive view of the airline's environmental impact. The court determined that these claims were too vague and gave the false impression that flying with KLM was sustainable.14
In May 2024, the EU launched investigations into 20 airlines, including Lufthansa, Air France-KLM and Brussels Airlines, requiring them to provide robust scientific evidence supporting their carbon reduction claims.15 Similarly, in August 2024, the UK’s Advertising Standards Agency banned a Virgin Atlantic Airways advertisement for making unqualified claims about a transatlantic flight allegedly powered entirely by sustainable aviation fuel.16 These legal actions are significant, given that air travel remains the most carbon-intensive mode of transportation and presents substantial challenges for decarbonization.17
# XII. Connecting greenwashing’s decline to intensified regulatory scrutiny
Despite the substantial increase in the severity of greenwashing cases in Europe and North America, RepRisk data shows a 12% decrease in the overall number of companies associated with greenwashing risk for the first time since 2019. Publicly traded companies have led this trend, showing a more pronounced reduction in incidents compared to private firms. Although the number of greenwashing incidents remains significantly higher than pre-2020 levels, the recent decline highlights a growing awareness among companies that greenwashing is a material offence, prompting them to take proactive steps to mitigate their exposure.
Regulation is likely to have played a significant role in driving this downward trend. The 20% decline in incidents in the EU coincided with the introduction of a large number of new regulations over the past 12 months that have propelled the regulatory movement forward.
For example, The EU’s new Green Claims Directive (GCD) requires companies to back up broad environmental claims, such as “carbon neutral” or “made from recycled materials,” with credible evidence and reliable methodologies. Non-compliance can lead to legal consequences and financial penalties of up to 4% of a company's turnover. Moreover, the EU’s Empowering Consumers Directive, effective March 2024, bars vague environmental claims unless supported by clear evidence. It also limits sustainability labels to those issued by public authorities or based on approved certification schemes. Additionally, claims of climate neutrality or benefits from carbon offsetting are strictly banned.
In the UK, a newly introduced anti-greenwashing rule demands that firms be able to demonstrate that their products and services genuinely deliver on their environmental promises. In-scope companies must ensure their sustainability and environmental claims are accurate and reflect their products' environmental impact across the full life cycle.
In the US, the Green Guides, issued by the Federal Trade Commission (FTC) since 1992, also include guidelines to prevent false or misleading environmental claims. While not legally binding, they form the basis for FTC enforcement, with the authority to impose fines. Key points include general principles for truthfulness and accuracy, specific guidance on terms like "recyclable" and "biodegradable," and advice on qualifying claims to avoid consumer deception. In March 2021, the US Securities and Exchange Commission launched an ESG task force targeting investment advisers for making misleading ESG claims, and issuers for deceiving investors about climate risks and green tech. The enforcement actions are widely seen as having sent a strong message about the need for compliance with ESG regulations.
Nonetheless, US greenwashing trends differ from the EU. Greenwashing cases in the US peaked in 2022, with a 35% YOY increase from 2021. This was followed by a 10% decline in 2023 and a modest 6% rise in 2024. One possible explanation for the divergence in the US is the increasing politicization of ESG. The earlier decline may be linked to companies and funds becoming more cautious about promoting their green credentials, responding to pressure from investors, state attorneys general, and other state-level political figures opposed to considering ESG criteria in investments.
"Implementing laws and regulations against greenwashing can standardize the language companies use about their environmental efforts and thus boost their accountability. As environmental impacts become more material, companies face greater pressure to align their statements with real action.”
Jessica Quiazon, ESG Research Lead at RepRisk
# XIII. Outlook: intensified regulatory scrutiny may bring risks on their own
Increased public and regulatory scrutiny of corporate environmental claims is essential in ensuring that businesses align their actions with their stated sustainability commitments. As consumer awareness and preference for supporting environmentally responsible companies continue to grow, the ESG-related information that companies share with the public has become particularly important. To align with this shift in mindset, it is vital for companies to present scientifically validated claims regarding their environmental impacts and commitments.
While this heightened focus is likely to curb greenwashing, it may also encourage greenhushing – a practice where companies understate or avoid discussing their sustainability initiatives to reduce legal risks. This trend could result in reduced transparency and hinder progress toward genuine sustainability.
Furthermore, as standards shift, some investments in transitional infrastructure may increasingly be viewed as greenwashing if their broader environmental or social impacts, such as resource extraction or negative impacts on communities, are not fully considered. Not every investment in transitional infrastructure may withstand future scrutiny. Investors and companies must therefore remain vigilant as both regulatory expectations and public awareness continue to evolve.
RepRisk and greenwashing risk
Greenwashing frequently stems from corporate messaging. To expose it, investors and companies should prioritize information from external, independent sources about these claims. Learn more about RepRisk’s unique methodology or contact us to explore how our data can help your business meet rising ESG expectations.
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