Greenwashing: Consumer Brands in the Crosshairs
New products incorporating and communicating their sustainability benefits increased from ~28% in 2017 to over 48% in 2021. This growth represents a growing interest in sustainability by consumers and the public. To satisfy this interest, organizations have at times put forth claims that do not stand up to scrutiny, a practice commonly referred to as greenwashing. Regulatory and legal efforts have emerged to challenge the claims, with the intent of ensuring that companies that make false and misleading statements are held accountable.
Consumer-facing industries have borne the brunt of anti-greenwashing enforcement actions. Demonstrably, in July 2025, France’s General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) fined fast-fashion giant SHEIN €40 million for deceptive practices, including greenwashing claims related to the environmental impacts of its products.
Just as consumer brands have faced scrutiny over misleading environmental claims, asset managers now confront comparable pressure. As the demand for progress on sustainability practices intensifies, so does the incentive for asset managers to project credibility and ultimately heightening the potential for overstatement.
Recent greenwashing enforcement activity in the EU, UK, and US can serve as a playbook for investors and portfolio companies alike to manage these potential risks.
Anti-Greenwashing Approaches That Are Working
Over the past few years, we have observed several trends in how authorities are making headway in combatting greenwashing, namely:
- Regulation rooted in consumer protection principles: Legislation based on adaptable principles rather than technicalities has led to anti-greenwashing wins
- Implementation of cutting-edge technology in compliance: Anti-greenwashing monitoring supported by AI has scaled investigation capacity and shifted oversight from reactive to proactive
- Legal intervention: Where regulatory advancements have stalled, the justice system has served as a backstop to stymie greenwashing
Below, we explore the cases that regulators and oversight bodies have brought under these different approaches, and the implications for managers and their portfolio companies.
Anti-Greenwashing Approaches in Practice
1. Regulation rooted in consumer protection principles:
Germany’s century-old consumer protection legislation, the Act Against Unfair Competition (UWG), has proven adaptable and enforceable against greenwashing.
Established in 1909, the UWG is grounded in interpretable principles as compared to narrow technicalities, which has allowed the regulation to evolve as novel threats to consumer protection, like greenwashing, have emerged.
The UWG has been recently activated, most notably, when the Environmental Action Germany (DUH) filed a complaint against Adidas in 2024 related to the company’s claim that it would be “climate neutral by 2050”. In March 2025, The Nuremberg-Fürth Regional Court prohibited Adidas from using the claim on the grounds that it was unsubstantiated, and therefore, violated the UWG.
The ruling was a corporate-wide anti-greenwashing success. Where other anti-greenwashing triumphs have been product-specific, and therefore incremental, Germany was effectively able to bar Adidas from relying on such unfounded claims across the entire brand’s marketing and PR strategies.
2. Implementation of cutting-edge technology in compliance:
The UK has seen progress in countering greenwashing by buttressing its compliance monitoring and investigation capabilities with new technology.
The UK implemented an environmental claims section (Section 11) into its advertising code (CAP) in 2011. In 2023, the body responsible for enforcing the CAP, the Advertising Standards Authority (ASA), implemented an AI tool to monitor advertisements, including environmental claims violations.
By the end of 2023, ASA’s AI tool had processed over 500,000 advertisements per month, and the increased monitoring scale produced meaningful results, for example:
- December 2025, the tool flagged product advertisements from major fashion brands Nike, Lacoste, and Superdry for unsubstantiated sustainability claims
- June 2026, the tool flagged Adidas, Uniqlo, and Calvin Klein for misleading claims of “responsible” and “recycled” within product marketing.
In each of these cases, the advertisements were rescinded. The investment in AI marked a notable transition from reactive, complaint-led investigations to a scaled, proactive monitoring approach that broadened ASA’s purview, and ultimately led to the identification of greenwashing claims that had been previously overlooked.
3. Legal intervention:
As public awareness and interest in sustainability have increased, legislators have worked to pass sustainability-focused regulations. Still, these laws, many of which include anti-greenwashing protections, have faced pushback that has stalled their implementation.
In the interim, accountability has increasingly come from the courts. In February 2024, New York Attorney General Letitia James sued JBS USA, alleging that the company’s “Net Zero by 2040” pledge was deceptive. In November 2025, the parties settled. In the settlement, JBS agreed to retire the claim in question, submitted to three years of monitoring with oversight from the Attorney General’s office, and made a $1.1 million climate-smart agriculture donation.
Despite this settlement, JBS continues to face legal pressure from nonprofits regarding its net zero and emissions claims, which to date have led JBS to abandon the target altogether, as of July 2026.
As it relates to greenwashing, the judiciary has proven a powerful backstop for accountability even when sustainability regulation has faced challenges.
Current State of Anti-Greenwashing Regulations
Regulations directly aimed at curbing greenwashing are growing, most notably:
- The UK’s 2024 Anti-Greenwashing Rule. The Financial Conduct Authority (FCA) implemented an anti-greenwashing rule requiring sustainability claims by the financial services industry to be fair, clear, and not misleading
- The US’s 2023 AB 1305 (Voluntary Carbon Market Disclosures Act). California became the first US state to directly regulate climate-related marketing claims, requiring companies making “net zero” or “carbon neutral” claims to publicly substantiate them
- The EU’s 2022 Corporate Sustainability Reporting Directive (CSRD), and its associated European Sustainability Reporting Standards (ESRS). While the Omnibus I Directive reduced the scope of the CSRD and the requirements of the ESRS were reduced, key provisions will still help address greenwashing:
- The double materiality inclusion will require companies to report both positive impacts and negative externalities related to its sustainability claims, balancing the environmental claims put forth by companies.
- The ESRS also standardizes company disclosures, which will help make claims verifiable and comparable across companies.
- The EU’s 2023 Green Claims Directive. While stalled since 2025, the Directive’s pre-market substantiation of environmental claims could turn a major corner on greenwashing enforcement if the Directive is picked up, or even if the provision is included in other legislation in the future.
Silver’s Guidance
We urge our clients to be mindful that investor pressure to demonstrate performance has pushed managers and companies alike to pursue progress. However, progress is not often achieved at rapid pace, creating an incentive to over-state and underdeliver on expectations. The risk of falling into a greenwashing trap, as a result, may be considerable.
Investment advisers have long been cognizant of disclosure-related risks, as the SEC’s marketing and advertising rule, established as part of the Investment Advisers Act of 1940, as amended, has guided managers to ensure that their external disclosures are rooted in practice. Investment managers would do well to recognize that greenwashing is fraud, called by a different name.
Oppositely, the risk of reducing disclosure or “hiding” progress related to sustainability-related initiatives as a reaction to increased regulatory attention, political backlash, or other signals, can lead to under disclosure of key information. Purposefully withholding information that may be deemed critical to some, or all, stakeholders, may equally be viewed as misleading.
For investment managers or portfolio companies making sustainability-related claims, our guidance is the same – ensuring all claims are defensible and backed by concrete rationale is paramount in the face of burgeoning greenwashing enforcement both in Europe, the U.S and across the world.
Interested in discussing how Silver can support your firm’s sustainability initiatives? Reach out to Silver’s Sustainability Risk & Strategy Team at [email protected].
Silver’s SRS Team is grateful to Cecila Reis for her contributions to this piece.