6 types of greenwashing

What is greenwashing?

According to ClientEarth, greenwashing is a deceptive practice where companies present themselves as environmentally friendly and sustainable, despite their operations causing significant environmental harm. 

Why do companies greenwash?

Companies engage in greenwashing for various reasons, including:

1. Pressure to act sustainably: The urgent call for climate action and increasing awareness among consumers push companies to adopt green initiatives, sometimes before they are ready to invest sufficiently in meeting their environmental goals.

2. Lack of information: Insufficient data makes it challenging to assess the full environmental impact of a company’s operations, allowing room for misinterpretation and misleading statements.

3. Lack of transparency: Many instances of greenwashing arise from a deliberate choice to omit relevant information or present selective data, giving a skewed view of a company’s environmental performance.

4. Lack of ambition: Some organizations struggle to grasp the magnitude of the challenges ahead and fail to develop realistic plans to meet their sustainability objectives.

5. Lack of accountability: Weak governance structures within companies contribute to a culture where greenwashing goes undetected and unrestricted.

6. Lack of incentives: The absence of strict consequences for greenwashing encourages companies to continue the practice, especially since sustainable investing is gaining popularity.

7. Lack of standards: Conflicting and inconsistent guidelines for measuring and reporting sustainability allow companies to exploit gaps in the system.

It boils down to a mix of external pressure and internal shortcomings. On one hand, there’s a genuine push from consumers and regulators for businesses to be more sustainable. On the other hand, companies struggle with insufficient data, unclear regulations, and the lack of a strong sustainability strategy, leading them to opt for the appearance of green rather than the reality of it. 

“We have forgotten how to be good guests, how to walk lightly on the earth as its other creatures do.”

Barbara Ward

6 types of greenwashing

In a groundbreaking effort to shed light on this issue, Planet Tracker has identified 6 types of greenwashing, offering us a lens through which we can better understand and combat these misleading practices. 


Greencrowding is the practice of hiding in numbers to obscure individual environmental accountability. This approach dilutes individual responsibility, allowing companies to benefit from a collective facade of sustainability without significant individual contribution. A striking example is the Alliance to End Plastic Waste (AEPW), closely linked to the American Chemistry Council, which opposed the Global Plastic Pollution Treaty. Despite bold claims of tackling plastic waste, the AEPW recycled a negligible amount of plastic, less than 0.0004% of global production, revealing a vast gap between promise and action. The alliance’s failure to provide transparent, measurable progress further underscores the deceptive nature of greencrowding, highlighting the need for diligent scrutiny of such collective environmental initiatives.


Greenlighting occurs when companies highlight minor green initiatives to distract from larger, damaging activities. This selective showcasing misleads the public about the company’s overall environmental impact, creating an illusion of sustainability. TotalEnergies exemplifies this by promoting its rebranding and minor green initiatives on social media, despite planning to increase oil and gas production, which contradicts its purported commitment to reducing emissions. This discrepancy led to legal actions accusing TotalEnergies of misleading practices, as these greenlighting efforts obscure the reality of their environmental footprint, demonstrating the manipulative potential of selective corporate messaging.


Greenshifting is a tactic where companies shift environmental responsibility onto consumers, deflecting from their own impact. By implicating consumers, corporations sidestep accountability for their significant roles in pollution and environmental degradation. Shell’s inquiry to the public about reducing emissions, despite its own substantial contributions to climate change, is a prime example. Harvard researchers further highlighted ExxonMobil’s strategic communications focusing on consumer behavior over corporate accountability. Such greenshifting not only misleads public perception but also unjustly reallocates the burden of environmental action, illustrating the strategic avoidance of corporate responsibility.


Greenlabelling involves misleading claims about a product’s environmental friendliness. It exploits consumers’ desire for sustainable options, often without providing the full context or verifiable information. SC Johnson’s Windex Vinegar Ocean Plastic bottle, marketed as made from 100% ocean plastic, later clarified to include “ocean-bound” plastic, which significantly broadens the claim’s scope. Similarly, KLM faced a lawsuit over its CO2ZERO program for misleading claims about offsetting the environmental impact of flying. These cases reveal the complexity of greenlabelling, where nuanced or partially true claims mislead consumers and obfuscate the products’ real environmental impacts.


Greenrinsing describes the practice of frequently changing environmental targets without genuine progress. It’s a strategy to appear ambitious in sustainability goals while failing to meet them, leading to skepticism about corporate environmental claims. Coca-Cola and PepsiCo have notably adjusted their recycling targets multiple times without significant achievement, exemplifying greenrinsing. This tactic, reflecting a broader trend of unmet and constantly shifting environmental goals, undermines trust in corporate sustainability efforts and highlights the need for more stringent and transparent accountability measures.


Greenhushing is when companies under-report or hide their sustainability achievements to evade scrutiny or inflate their perceived progress. It’s a subtle form of greenwashing that misleads investors and the public about a company’s environmental efforts. The downgrading of funds by major asset management firms, purportedly in response to strict regulation, may also serve to obscure the true extent of their environmental engagement. This strategy, while less overt, contributes to the misinformation surrounding corporate sustainability performance, emphasizing the complexity of greenwashing tactics and the importance of rigorous, independent verification of corporate environmental claims.

What’s next: best practices for investment managers

Members of the European Parliament (MEPs) have adopted a new law aimed at combating greenwashing and improving consumer information on product durability. Parliament’s rapporteur Biljana Borzan (S&D, HR) said: “This law will change the everyday lives of all Europeans! We will step away from throwaway culture, make marketing more transparent and fight premature obsolescence of goods. People will be able to choose products that are more durable, repairable and sustainable thanks to reliable labels and advertisements. Most importantly, companies can no longer trick people by saying that plastic bottles are good because the company planted trees somewhere – or say that something is sustainable without explaining how. This is a big win for all of us!”

As the financial industry moves towards a more sustainable future, investment managers are at the forefront of adopting practices that ensure transparency, accountability, and genuine impact. The evolution of sustainable finance necessitates tools that offer precise and verifiable data to guide investment decisions. In this landscape, the integration of Internet of Things (IoT) technology into sustainability assessments presents a promising direction. 

Aquila is pioneering the use of IoT-driven data to revolutionize sustainable finance. Providing investment managers with granular, real-time environmental data, we enable a deeper understanding of the actual impact of their investments, moving beyond self-reported data that can be susceptible to greenwashing.