Greenwashing research summary. As more consumers become conscious of the environmental impact of their purchases, many companies have stepped up to offer greener products. Many, but not all. Some companies claim to be environmentally friendly, without that being the case.
So, if you’re a conscious consumer or job seeker wanting to know more about greenwashing, you’re in luck. We’ve gathered all the latest greenwashing statistics, and according to our extensive research:
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68% of US executives admit their companies are guilty of greenwashing.
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88% of Gen Z say they don’t trust brands’ environment, social, and governance (ESG) claims.
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42% of corporate environmental claims made online are likely deceptive or false.
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58% of global c-suite leaders admit to greenwashing.
For further analysis, we broke down the data in the following ways: Greenwashing Prevalence | Consequences | Consumer Opinions
Corporate environmental claims statistics
Corporations make a variety of claims about their positive environmental impact. However, these claims can’t always be backed up. Here are some examples of the claims companies make, and how they lack evidence:
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42% of greenwashing claims are exaggerated or false.
Similarly, the same European study found that 53.3% of EU environmental claims are vague, misleading, or unfounded.
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In over 50% of cases, companies couldn’t provide facts to back up statements about green efforts.
Many companies make statements about their green initiatives on their websites and in advertisements. However, when push comes to shove, over half of them can’t substantiate their claims.
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60% of executives say their organization is overstating sustainability methods.
85% of executives believe customers are becoming more vocal about sustainability, and because these companies want to please their customers, they often make exaggerated claims. The truth is that many companies are still trying to develop sustainability plans or are not prepared to implement them.
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59% of green claims made by the top European fashion brands are misleading.
Many brands use buzzwords like “sustainable,” “eco-friendly,” and “responsible” without substantiating them. Soon, the EU may respond by making green advertising much more difficult when scientific evidence isn’t provided to back up a company’s claims.
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40% of companies make green claims without evidence.
An excellent example is a tissue or toilet paper product that claims to be partially made from recycled material despite not offering any substantiating evidence to prove that.
Greenwashing prevalence statistics
As you can see, greenwashing is more prevalent than you might have realized. Due to consumer pressure, many companies feel the need to make sustainability claims, without being able to provide evidence proving those claims are being honored. To understand just how big of an issue greenwashing is, here are some facts you should consider:
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72% of North American companies admit to engaging in corporate greenwashing.
That share is 24% higher than the global average, which is 58%, meaning that greenwashing is especially prevalent in North America.
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43% of employees believe their company is greenwashing.
Further, 83% of employees believe their company isn’t doing enough to be more sustainable. Unfortunately, employee interest has done little to impact the actions of executives.
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Greenwashing instances by global banks and financial service companies increased by 70% between 2022-2023.
In over 50% of these cases, banks were linked to oil or fossil fuel companies, going against their sustainability claims.
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80% of executives think their companies are doing well with environmental sustainability.
Additionally, 86% believe their efforts make a difference in advancing sustainability. While many companies do follow ESG standards, the majority of consumers believe these standards don’t go far enough. That’s partly where the disconnect and perception of greenwashing stem from.
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Only 36% of companies have measured the effectiveness of their sustainability programs.
While 85% percent of companies claim to have started developing or implementing sustainability programs, only 36% have measured the outcomes of their plans.
Companies by sustainability program implementation
Status of sustainability program Share of companies Have not started a program 6% Thinking about starting a program 9% Developing a program 27% Implementing a program 22% Measuring the impact of their program 22% Optimizing program based on measured outcomes 14%
Consequences of being caught greenwashing
With the majority of executives admitting to greenwashing, you might be wondering what the consequences of being caught are. Fortunately, we’ve gathered some key insights:
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72% of corporate leaders say most organizations in their industry would be caught greenwashing if investigated thoroughly.
Ironically, even though most executives believe they’re doing well with environmental sustainability, they also believe all the others around them would be caught for greenwashing if investigated.
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Companies perceived to be greenwashing suffer a 1.32% drop in customer satisfaction scores.
Subsequently, this drop in customer satisfaction score leads to an average of 0.032 units of change in net earnings and a 0.40 change in ROI.
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90% of the data needed to understand sustainability performance isn’t available to companies.
Given that only 36% of companies have been able to measure their sustainability programs, it’s unsurprising that there’s a lack of data out there. Without data, companies can’t even know if their programs are effective.
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The largest greenwashing lawsuit resulted in Volkswagen being fined $33.3 billion.
In 2020, Volkswagen was fined for falsified emission reports related to AG Clean Diesel. As a result, the company faced multiple fines, penalties, financial settlements, and buyback costs, resulting in billions of dollars.
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60% of companies have emissions reduction targets.
However, only 81 major companies have disclosed a credible climate transition plan.
Consumer opinions on greenwashing
Consumers have grown increasingly concerned about sustainability over time. For many, being promised sustainability initiatives, only to find out those initiatives were false or exaggerated, can feel like a massive stab in the back. Here’s what the consumers are saying:
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38% of Americans believe companies should be environmentally responsible.
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41% of Americans believe companies are doing a poor job reducing their carbon footprint.
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66% of consumers will pay more money for sustainable products.
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55% of US consumers would stop buying from brands that have been proven to make false claims about sustainability.
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75% of Gen Z factors in the sustainability of a product before purchasing, compared to 65% of Baby Boomers.
Importance of sustainability when purchasing a product by generation
| Generation | Share of consumers who say sustainability is a factor |
|---|---|
| Gen Z | 75% |
| Millennials | 71% |
| Gen X | 73% |
| Baby Boomers | 65% |
Greenwashing FAQ
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What is greenwashing?
Greenwashing is when a company makes false or misleading claims about the sustainability of its products and business practices. Environmental concerns have become a major factor in consumer behavior. However, many companies have yet to develop effective sustainability programs and research.
Instead of being honest about this, many companies make sustainability claims to attract more customers and improve brand reputation, even if those claims are unsubstantiated.
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What are examples of greenwashing?
There are many examples of greenwashing you can notice. Here are the top three:
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Lack of evidence supporting sustainability assertions. An example of this would be a tissue company that claims to use recycled materials, even though there is no evidence to support that claim.
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Exaggerate environmental benefits beyond the evidence given. For instance, if that same tissue company uses some recycled materials, but advertises that process as being more sustainable than it actually is, that would also be greenwashing.
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Promote products as environmentally friendly while obtaining raw materials from unsustainable sources. For example, many electric car brands promote the sustainability of their vehicles, while also sourcing the metals used in their batteries from unsustainable sources.
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What companies are greenwashing?
Many top companies, including Volkswagon and Starbucks, are guilty of greenwashing. Volkswagon, in particular, owes over $33 billion in fines due to greenwashing.
Other guilty companies include:
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BP
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ExxonMobil
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Nestlé
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Coca-Cola
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IKEA
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Poland Spring
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H&M
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JP Morgan, Citibank and Bank of America
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McDonald’s
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Walmart
And many more.
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What percentage of companies are greenwashing?
58% of companies worldwide are greenwashing. This share is even higher in North America, where 72% of all companies are greenwashing.
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In what industries is greenwashing most common?
Greenwashing is most common in the fashion industry. Due to concerns about fast fashion and abusive labor practices, many fashion companies want to increase the industry’s social and environmental standards. However, greenwashing has only further exacerbated the issue.
Other industries with high rates of greenwashing include:
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Auto Industry
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Food and Beverage Industry
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Banking and Finance Industry
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Energy Industry
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Conclusion
As customers grow more concerned about the environmental impact companies have, more companies have moved to appear environmentally conscious. Unfortunately, the lack of infrastructure and investment into sustainability has led many to make false or misleading claims for the sake of brand reputation rather than committing to real sustainability.
A staggering 72% of North American and 58% of global companies admit to greenwashing, which has had negative financial consequences. For instance, Volkswagen was fined over $33 billion in 2020 due to greenwashing.
Many consumers have noticed greenwashing, and 55% say they will take their business away from companies caught doing it. For the sake of the planet and long-term investment, companies are far better off being honest and investing in real sustainability programs.
References
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LinkedIn – 68% of CEOs admit their businesses are guilty of greenwashing.
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European Commission – Consumer protection: enabling sustainable choices and ending greenwashing
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Reuters – Banks behind 70% jump in greenwashing incidents in 2023 -report
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Google Cloud – Report: What it will take for CEOs to fund a sustainable transformation
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Circularise – Greenwashing lawsuits in businesses: Notable cases and consequences (Part 2)
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WEF – Gen Z cares about sustainability more than anyone else – and is starting to make others feel the same
Author
Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.
