Greenwashing explained: What Irish consumers should know

Greenwashing is becoming harder to detect as more products and services use eco-friendly language. But what does greenwashing really mean, and how can Irish consumers and investors spot it? This article breaks down greenwashing definitions, provides real-world examples, and explains the evolving EU and Irish regulations.

Recognising common types of greenwashing can help you identify misleading claims. Key aspects and types of greenwashing include:

• Vague goals: Companies claiming to be “sustainable” or on a path to “net-zero” emissions, without a clear plan or publicly released evidence.

• Misleading labels, imagery, and claims: Utilising green colours, nature-related imagery, or vague terms (e.g., eco-friendly, natural, or green) to create an illusion of sustainability.

• Lack of supporting evidence: Making environmental claims without backing them up by credible information or third-party certifications.

• Hidden trade-offs: Highlighting one mildly sustainable attribute (e.g., made with partially recycled materials) while undermining the environmental damage from the overall production process or business practices.

• Green labelling: Suggesting products are sustainable without verified proof (often seen in fashion or fast fashion labelling).

• Offset-only carbon neutral claims: Relying on compensation, not action.

Such claims may not meet advertising standards and might create confusion for investors and consumers. Ensuring clarity around greenwashing strategies could help build trust.

When terms like “eco” or “green” are used daily, it can be difficult to know what they actually represent. Data from the European Commission suggests that over half of environmental claims in the EU may be unclear, exaggerated, or not supported by facts. This reduces trust among consumers and makes it harder to find genuine sustainability initiatives. 

Greenwashing can also distort competition, giving companies with inflated green claims an unfair advantage while undermining investor trust in responsible business models. This lack of transparency can lead to public mistrust. Even well-intentioned efforts may be questioned, which could weaken confidence in long-term sustainability goals across industries.

Some brands may choose not to publicise their sustainability initiatives, which is known as green hushing. This approach could be intended to avoid regulatory attention or public scrutiny. While it can appear cautious from the outside, it might also mean that key details about emissions or environmental impact remain hidden.

Another similar method is green bleaching, which was recently highlighted by the Central Bank of Ireland. This involves downplaying or omitting eco-friendly activities in order to minimise perceived risk. Both tactics reduce transparency and make it harder for consumers to assess environmental claims with confidence.

For example, a brand might promote packaging as recyclable, but avoid mentioning that the core material comes from unsustainable sources. These types of selective claims can mislead by highlighting small improvements while ignoring the full environmental picture.

For investors trying to align their money with ESG (environmental, social, and governance) values, greenwashing could make it harder to tell which products meet real standards and which ones just sound convincing. Some ESG-branded offerings may look eco-friendly at first glance, but without strong definitions or independent checks, they might not reflect genuine sustainability practices.

In Ireland, this lack of clarity can result in ESG assets that involve businesses linked to polluting sectors. If classification systems remain vague, green labels risk becoming more about branding than about actual progress. This could undermine efforts to grow confidence in sustainable finance.

When expectations don't match reality, there may be consequences for the wider reputation of the financial sector. Investors who feel misled by environmental claims may lose trust, not just in individual providers, but in ESG investing more broadly.

One way to avoid this is by developing a better understanding of sustainable finance, which could help make informed investment choices and support solutions that aim to protect the planet in real terms. You could also consider looking into green bonds or impact investing for other sustainable options.

Clear legal definitions now play a central role in tackling misleading environmental claims across both Irish and European markets. Under the Consumer Protection Act 2007, companies in Ireland must avoid making statements that could mislead the public about a product’s actual environmental impact. If a business markets its product as “eco-friendly” without factual support, this may breach regulation and can result in fines.

At EU level, two key directives were adopted in February 2024 and will apply from 27 September 2026. 

• The Green Claims Directive requires companies to ensure their environmental claims are truthful, specific, and backed by verified documentation. 

• The Green Transition Directive places tighter controls on generic terms like “climate neutral” when these are based only on carbon offsetting, not actual emissions reduction.

These new EU rules aim to align environmental marketing across member states. To meet the latest standards, businesses must show that any use of sustainability labels is supported by third-party checks and clear proof. This is expected to reduce vague claims, boost consumer confidence, and set a level playing field for companies making genuine efforts towards sustainability.

From 2026, companies across the EU face tighter checks on environmental marketing. 

Under the Green Claims Directive, any claim related to sustainability – such as “recyclable” or “eco-conscious” – may need accredited evidence and third-party verification to be used legally. Claims without measurable outcomes or documented proof could lead to non-compliance.

The Green Transition Directive goes further by addressing broad terms like “climate neutral” when these rely on offsetting alone. If there’s no real emissions reduction involved, such terms might be banned. Companies should avoid vague or long-term promises that can’t be backed by science. 

Together, these directives aim to prevent misleading language and make environmental marketing more transparent across Europe.

The Consumer Protection Act 2007 includes legal consequences where advertising misleads the public, especially in relation to environmental or ESG matters. Companies operating in Ireland that present false or unclear environmental claims could face penalties under national regulation. If a case is considered serious, it may result in fines of up to €60,000 or, in severe cases, prison sentences of up to 18 months. These rules help support honest marketing and maintain Ireland’s advertising standards.

To further strengthen consumer protection, the Collective Redress Scheme allows groups of consumers to take joint action against companies that misrepresent their environmental practices. This adds both financial and reputational pressure for businesses to ensure transparency, especially when making sustainability-related claims. Failing to meet current expectations in ESG communication could lead not only to legal consequences but also long-term reputational harm.

To strengthen credibility and reduce the risk of non-compliance, companies can take extra measures to avoid greenwashing products. Some key strategies include: 

• Using third-party certification: Making sure all public claims about eco-performance are backed by independent verification and certifications if needed.

• Transparent communication: Communicating clearly across all stages, from sourcing materials to promoting products, to support transparency and helps consumers understand what’s actually being done.

• Be specific: Avoid generic phrases like “planet-friendly” unless they can be supported by scientific findings, to avoid misleading information or potentially undermine trust.

• Using data-driven reporting: Carrying out internal audits and using lifecycle analysis to assess environmental impact may help demonstrate that sustainable efforts go beyond surface-level marketing. 

These steps provide measurable proof that sustainability plays a role in decision-making across the business, not just in external messaging.

For those looking to avoid misleading sustainability messaging or environmental claims, checking for independent certification and science-based validation may help separate genuine efforts from empty slogans. Looking beyond broad terms like “eco-friendly” and reviewing what data supports a claim can strengthen consumer protection.

Before choosing where to invest, individuals might find it useful to: 

• Check for third-party certification on environmental claims

• Review ESG ratings before making investment decisions

• Look for clear, data-backed sustainability efforts, rather than just buzzword-heavy marketing claims

• Assess whether the reported goals are matched by specific, transparent actions

This kind of review could highlight potential gaps between stated values and actual measures. When people demand greater accountability from companies, it might lead to higher standards over time.

At Raisin, sustainability means creating long-term value for people and society by promoting financial inclusion, diversity, and environmental responsibility. In recent years, we’ve developed our framework with a dedicated Sustainability Strategy and clear ESG governance. Our first Sustainability Report is an important milestone that reaffirms our commitment to building an impactful organisation.

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