Greenhushing? How companies are avoiding greenwashing lawsuits with caution, transparency and clarity

Submitted: Two Sides North America January 22, 2025

Businesses increasingly recognize the importance of environmentally friendly practices, especially when it comes to packaging, proper disposal and recycling, and using truly sustainable materials like paper. However, a new trend has emerged: companies are becoming more cautious about how they communicate these initiatives. Amid a rise in greenwashing lawsuits, where businesses are accused of overstating or misrepresenting their environmental efforts, many companies are shifting to a more subdued approach. This change reflects not only legal caution but also a growing demand for transparency and adherence to credible standards, such as the FTC’s Green Guides in the U.S. or the Competition Act in Canada.

The Rise of Greenwashing Concerns

In an era when consumers actively seek eco-friendly options, companies have made efforts to demonstrate their commitment to sustainability. Terms like “biodegradable,” “recyclable,” and “carbon neutral” have appeared more frequently on packaging and in marketing. 

Many marketing slogans fail to meet the requirements of established environmental marketing standards, such as those of the U.S. Federal Trade Commission (FTC), the Competition Bureau of Canada, the International Organization for Standardization (ISO 14021), the United National Environment Program, and the World Federation of Advertisers. All of these standards disallow the use of broad environmental claims and require that all claims are supported by sound scientific evidence.

A series of high-profile lawsuits brought attention to companies that made bold environmental claims without robust data or transparency to back them up. Essentially, they were in violation of FTC standards, which state: “Marketers should not make broad, unqualified general environmental benefit claims like ‘green’ or ‘eco-friendly.’ Broad claims are difficult to substantiate, if not impossible. It is deceptive to misrepresent, directly or by implication, that a product, package or service offers a general environmental benefit.”

Greenwashing lawsuits—where companies are accused of making misleading or exaggerated environmental claims—can be costly in both financial and reputational terms. These lawsuits often hinge on whether the business has adequately substantiated its environmental claims, leading some companies to avoid such language altogether. The result? A growing trend of “green silence,” where businesses, wary of potential litigation, choose not to highlight their environmental efforts.

Transparency Builds Trust, Reduces Litigation

The Federal Trade Commission’s (FTC) Green Guides were established to help companies avoid making deceptive environmental claims. By offering specific guidelines on how to substantiate green marketing claims, the Green Guides provide a framework that protects both businesses and consumers.

They outline the need for clear language, the importance of defining terms like “eco-friendly,” and the requirement for supporting data to back up any claims made. For example, if a product is marketed as “recyclable,” the FTC suggests that businesses should ensure the product can indeed be recycled in most communities. The Green Guides encourage companies to avoid vague language that can mislead consumers, pushing instead for clarity and data that fosters trust and understanding.

An updated version of the Green Guides was expected to be released in late 2023, then in 2024. It now appears to be stalled, with no word about releasing an update, which would be the first in 13 years. If a new update is released, it will likely emphasize the verifiability of claims.

In response to the fear of greenwashing accusations, many companies are now investing in transparency rather than flashy claims. Instead of making sweeping statements, they’re adopting data-driven, specific descriptions of their environmental efforts. For example, a company might say, “This product’s packaging is made from 50% post-consumer recycled content,” rather than simply calling it “sustainable.”

Transparency goes beyond simple marketing; it builds trust. Companies can communicate their genuine commitment to sustainability by presenting a straightforward, honest assessment of what they are doing, and where they still have room to improve. Many businesses now include environmental impact reports on their websites, offering detailed breakdowns of how materials are sourced, the percentage of recycled content used, and the types of emissions reduced. This approach not only helps mitigate legal risks but also resonates with consumers who increasingly value openness and accountability.

Navigating the Future of Green Marketing

Businesses face a delicate balance between promoting their environmental efforts and protecting themselves from greenwashing accusations. The key lies in transparency, clarity, and adherence to guidelines like the FTC Green Guides, which allow businesses to communicate authentically about their sustainability efforts.

For companies, the message is clear: avoid broad or exaggerated environmental claims and focus on transparency and specificity instead. By doing so, they not only protect themselves from potential legal issues but also create a foundation of trust with their consumers. As sustainability continues to grow as a priority for consumers and corporations alike, those who communicate clearly and openly will be best positioned to build a loyal customer base and navigate the future of green marketing effectively.

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