What Is Greenwashing? How to Spot It and Why It Matters

In an era where climate change is front-page news and consumers are increasingly seeking sustainable products and services, it’s no surprise that companies want to be seen as environmentally friendly. But not all "green" marketing is created equal. Enter greenwashing—a deceptive practice that can mislead well-meaning consumers and damage trust in the clean energy transition.

What Is Greenwashing?

Greenwashing is when a company or organization spends more time and money marketing itself as environmentally friendly than actually minimizing its environmental impact. In short, it’s a form of deceptive marketing used to appear “green” without doing the hard work behind the scenes.

Coined in the 1980s, the term originally described hotels asking guests to reuse towels "for the environment," when in reality the motivation was purely cost-saving. Since then, greenwashing has evolved and become more sophisticated—and sometimes harder to spot.

Key Signs of Greenwashing

Whether you’re evaluating a product, service, or company, here are some red flags to watch for:

1. Vague or Unverifiable Claims

Phrases like “eco-friendly,” “green,” or “natural” without context or third-party verification are red flags.

2. Hidden Trade-Offs

Highlighting a small sustainable action while ignoring larger harms.

3. Irrelevant Certifications

Using outdated or meaningless badges to appear credible.

4. Green Imagery Without Substance

Overuse of visuals like leaves, forests, and water to distract from weak environmental performance.

5. Lack of Transparency

Failure to disclose emissions data, energy sources, or sustainability metrics.

The Line Between Greenwashing and Fraud

Greenwashing isn’t just a PR problem—it can be legally risky. If a company makes false or misleading environmental claims, it may cross the line into fraud or false advertising.

Real-World Example: Airlines Promoting “Sustainable” Flights

• Issue: Airlines are advertising flights as "sustainable" due to carbon offsetting or using a small percentage of sustainable aviation fuel (SAF).
• Why It’s Greenwashing: SAF is used in minimal quantities (often <1%), and carbon offsets are not real emission reductions.

Real-World Example: Carbon-Neutral Products (General Trend)

• Issue: Claims of "carbon neutral" bottled water, yogurt, or pet food.
• Why It’s Greenwashing: These are largely based on offsets rather than actual changes to operations, and regulators are increasingly cracking down on the term.

How GRESB Scores Help Prevent Greenwashing

One of the most effective tools in combating greenwashing in the real asset sector is the GRESB Assessment.

GRESB (Global Real Estate Sustainability Benchmark) is an industry-led organization that evaluates the environmental, social, and governance (ESG) performance of real assets—including infrastructure and real estate portfolios.

Why GRESB Matters:

• Third-Party Verified: GRESB data is independently validated, providing credible benchmarks companies can’t self-inflate.
• Transparent Scoring: Participants are scored on measurable metrics such as carbon intensity, renewable energy use, water management, and stakeholder engagement—not just vague promises.
• Comparable and Standardized: Because GRESB uses a consistent methodology, it allows investors, regulators, and the public to compare companies on a level playing field.
• Accountability Through Disclosure: Companies that submit to GRESB commit to disclosure of ESG risks and opportunities, making it harder to hide behind green PR.
• Investor Confidence: A high GRESB score signals to investors that a company’s sustainability claims are real, not just marketing spin.

Example in Action:

If a renewable energy developer claims their portfolio is “net zero,” GRESB requires them to submit verifiable emissions data, energy mix details, and improvement plans. A good score shows real progress; a poor score may reveal greenwashing.

At PureSky Energy, we support ESG transparency and the use of trusted frameworks like GRESB to hold ourselves and the industry accountable.

How You Can Confirm a Company’s Claims

Great question. Checking a company’s environmental claims—and spotting greenwashing—takes a bit of digging, but here’s a step-by-step guide using reliable tools and questions to ask:

1. Read the Fine Print

• Look for specific data and timeframes. For example:
  • Good: “We reduced Scope 1 and 2 emissions by 30% from 2018–2023.”
  • Red flag: “We are committed to going green” or “we offset our emissions” (without detail).
• Be wary of buzzwords: “eco-friendly,” “sustainable,” “green,” “net zero”—when not backed by evidence.

2. Check the Company’s Sustainability Report

• Found on the company’s website (often under "Sustainability," "ESG," or "Investor Relations").
• Look for:
  • Verified data on emissions, energy use, water consumption, waste, etc.
  • Third-party audits or assurance (e.g., by SGS, BSI, or DNV).
  • Alignment with reporting standards like:
    • GRI (Global Reporting Initiative)
    • SASB (Sustainability Accounting Standards Board)
    • TCFD (Task Force on Climate-Related Financial Disclosures)

3. Use Reputable ESG & Watchdog Databases

• CDP (Carbon Disclosure Project) – Check if the company discloses environmental impacts.
• Sustainalytics – Offers ESG risk ratings (used by Morningstar).
• MSCI ESG Ratings – Rates companies on environmental, social, and governance criteria.
• GRESB – Rates real asset managers (used in real estate, infrastructure, solar, etc.).
• Climate Action 100+ – Lists how the world’s biggest emitters are doing on climate.
• Who’s Greenwashing? – A UK site that tracks misleading sustainability claims.

4. Search for Regulatory or Legal Action

• Look for news or rulings by:
  • FTC (U.S. Federal Trade Commission)
  • Advertising Standards Authority (UK)
  • European Commission (especially under the Green Claims Directive)
  • SEC (U.S. Securities and Exchange Commission), especially for ESG investing claims

Search tip:

Google the company name + “greenwashing,” “sustainability lawsuit,” or “advertising ban.”

5. Follow the Money

Ask:

• Does the company still invest in or profit from fossil fuels, deforestation, or plastics?
• What percentage of its revenue or capital expenditure is actually “green”?

Use sources like:

• Annual reports and 10-K filings (SEC.gov or company investor pages)
• Climate TRACE – Tracks real emissions by sector and geography

6. Check Third-Party Certifications (But Verify)

Legit certifications:

• B Corp
• Fair Trade
• Cradle to Cradle
• Energy Star
• LEED (for buildings)
• Forest Stewardship Council (FSC)

Watch out for self-created “green” logos or seals. These often mean nothing.

7. Ask These Key Questions:

Bonus: Use Browser Tools

• Earthly and Good On You (for fashion brands)
• ClimateRank Chrome plugin – overlays sustainability ratings
• ESG Book – offers free ESG scores and insights

Why It Matters for Clean Energy

Greenwashing undermines real progress in climate action. It confuses consumers, penalizes honest companies, and can delay urgent climate solutions. At PureSky Energy, we’re committed to transparency and real impact—from the way we build and manage our solar projects to how we talk about them.

We believe informed consumers are empowered consumers. That’s why we encourage everyone to ask questions, seek third-party certifications, and look for detailed disclosures when evaluating “green” claims.

Greenwashing might be common, but it’s not unstoppable. The more we learn to identify it—and support credible accountability tools like GRESB—the more we can push companies to walk the talk.

Because the planet doesn’t need more green logos—it needs real green action.