Erste Asset Management

Green or Greenwashing?

Green or Greenwashing?
Green or Greenwashing?
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Guest commentary by Raphael Fink of the Umweltzeichen Team at VKI

Greenwashing refers to a series of (PR) measures with which companies promote themselves or their products/services as environmentally friendly or sustainable – even though there is no factual basis for this.
Four aspects of greenwashing make the issue so relevant:

  1. Whether there is a factual basis, i.e. whether a positive effect is actually achieved for the environment, is usually not trivially comprehensible – and also not easy to recognize due to the complexity of the matter. In order to evaluate the sustainability of a company or a product, a large number of aspects have to be considered and additionally correlated with each other and placed in a broader context.
  2. Greenwashing is a central issue for the protection of consumers and the environment: If, for example, products are purchased in the false belief that they will have a positive effect on the climate, when in fact this is not the case, this not only misleads consumers, but also exacerbates the climate crisis.
  3. Greenwashing is often difficult to detect because the strategies behind it are manifold: they range from the use of invented labels to highlighting positive environmental effects while concealing the negative effects to the use of intentionally vague terms such as “green” or “climate neutral.
  4. Legal action against greenwashing is currently very difficult. Therefore, the European Commission is currently working on a legislative proposal (“Green Claims Initiative”) to get a better grip on the issue.

How can greenwashing be identified?

As a result of various greenwashing methods, its detectability is made more difficult for consumers. Nevertheless, there are a number of ways to spot greenwashing:

Healthy skepticism: It is especially important to be skeptical of “exaggerated” product promises. The advertising of a product with very general, intentionally vague terms such as “natural,” “close to nature,” “green,” or “sustainable” should always be critically scrutinized. Heightened vigilance may also apply to “climate neutral” products and services – especially in the fossil energy sector, for example.

Ask yourself questions: Can a disposable product be particularly environmentally friendly? Natural gas climate neutral? Is the area with which a company advertises lived sustainability also its core business (e.g., does a financial institution advertise environmentally friendly financial products that have been awarded the Austrian Eco-Label or “only” the conversion to LED lamps)? Is there publicly visible, comprehensible information – how transparent is the company? Is the entire product range of a company sustainable or only a very small part of the range? Are there controversies in other areas that the company is involved in?

Inform and research: Short Internet searches can provide initial answers to many of these questions. Sometimes you can quickly find out whether products or companies keep their promises because, for example, other consumers or consumer protection organizations may have already written or published something about it (e.g. in KONSUMENT). It is relatively easy to obtain useful information about quality seals on the Internet – reputable labels publish their criteria, are verified by independent third parties and clearly state what the quality seal stands for. Reputable labels include the Austrian Eco-Label, the German Blue Angel, the European Eco-Label and the Nordic Swan. Here, certified products can be used with a clear conscience.

Contact: Sometimes it can be helpful to contact the producers or distributors to ask directly – for example, by posting a corresponding entry in the social media of the company in question – publicity here can greatly increase the pressure for a response. In some cases, it may also be advisable to contact a consumer or environmental protection organization.

Working together against greenwashing

In order to get a better view of greenwashing, the Association for Consumer Information (VKI) started a project in March 2021, in the course of which on the one hand a low-threshold reporting possibility for possible greenwashing was created – and on the other hand a monthly greenwashing check is published.
In each greenwashing check, the “green” promise of a company or product is examined on the basis of a report. The company concerned also has the opportunity to submit a statement, which is also published – so that consumers can obtain comprehensive information about greenwashing. On the basis of various examples, a comprehensive picture is created of the form in which consumers are confronted with greenwashing. Therefore, you are also invited to submit your report here. All Greenwashing Checks published so far are freely readable. on

About the author: Raphael Fink works in the eco-label team of the VKI, which is in charge of the Austrian Eco-label on behalf of the Ministry of Climate Protection. Among other things, he is responsible for the Austrian Ecolabel for Sustainable Financial Products and for the EU Ecolabel. He is also project manager of the VKI Greenwashing Check.

Legal note:
Prognoses are no reliable indicator for future performance.



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