There is now a broad international consensus that climate change and environmental degradation is a burning issue, and that something needs to be done about it. However, that consensus does not extend to precisely what needs to be done, who needs to do it, or who should be policing these matters. Further, that consensus has come under recent strain, with some suggesting that it is better to focus on more immediate problems such as the cost-of-living crisis, rather than adopting green policies which (it is said) are expensive and relate only to distant future problems.

In this context, it is unlikely that there will soon be a broad legislative overhaul imposing strict environmental duties on business generally (as opposed to targeting specific polluting industries). This raises the question: If government will not impose broadly applicable environmental obligations on businesses, can litigation be used to pressurise them to take environmental matters more seriously?

One ambitious recent attempt was made by an activist shareholder of Shell to bring a derivative action against its board of directors, alleging that they were breaching their duties by failing to adequately deal with risks posed to Shell (and by Shell) by climate change. Perhaps unsurprisingly, the court in ClientEarth v Shell plc [2023] EWHC 1897 (Ch) was very reluctant to tell the board how to do its job and the application failed.

A more realistic possibility is for consumers to do what they have always done, and vote with their feet, by supporting businesses with positive green credentials and punishing those without. On this market-driven analysis, the green revolution will occur at the speed and scale that the public demands.

There is, however, reason to be sceptical of this analysis. As with all environmental damage scenarios, there is a tragedy of the commons problem. But apart from that, there is the additional difficulty of information asymmetry. A business knows how environmentally damaging its operations are, but its customers do not. Why would a polluting business admit to being dirty?


Greenwashing is where a business represents itself or its operations as more environmentally friendly than they really are. The most extreme examples of greenwashing are the cheating of diesel emissions tests which Volkswagen and a number of other car manufacturers have engaged in.

Greenwashing can also take the form of express misleading statements. For example, in January the Guardian published a report alleging that Verra, the world’s leading carbon offset certifier, had grossly overstated its certificates of greenhouse gas emissions reductions by more than 90%.

But greenwashing might be far more subtle, with misleading green credentials being implied through the use of imagery or symbols or the ‘feel’ of a brand. In fact, implied greenwashing may be far more resilient than express claims because it is harder to debunk. A recent behavioural study suggests that fossil fuel companies’ television campaigns which promote their efforts to transition to renewable energy solutions are surprisingly effective in improving the opinions of viewers – even where those viewers have been provided with hard data which contradicts the companies’ claims. (See Friedman, Ronald S., and Dylan S. Campbell. ‘An Experimental Study of the Impact of Greenwashing on Attitudes toward Fossil Fuel Corporations’ Sustainability Initiatives.’ Environmental Communication (2023): 1-16.)

Greenwashing is a common problem. In late 2021, an internet sweep conducted by (amongst others) the Competition and Markets Authority (‘CMA’), found that of a sample of 500 websites promoting products and services, more than 4 in 10 contained potential greenwashing.

It is also a widespread problem, affecting a wide variety of industries. According to the European Banking Authority, the sectors most involved in alleged greenwashing incidents in the EU were not only obvious industries like oil, gas, and utilities, mining, and industrials and construction, but also included travel and airlines, the financial sector, food and beverages, and retail (personal and household goods). (European Banking Authority, EBA Progress Report on Greenwashing Monitoring and Supervision (2023) at 23.)

The fundamental difficulty posed by greenwashing is this: It prevents businesses which genuinely adopt green policies from being able to compete with businesses which just pretend to.

Identifying greenwashing

The following practical steps can be useful in identifying greenwashing:

  • First, be wary of ‘buzzwords’, ie words which sound environmentally friendly but which have no clear and fixed meaning.
  • Second, even where a specific environmental claim is made, the devil is in the detail. A company may highlight a single green aspect of its operations to distract from its business generally being dirty.
  • Third, be wary of images which merely imply environmentally friendly practices or values.
  • Fourth, a genuine green claim is more likely to be supported with reference to evidence, eg statistics or data explaining the claim.
  • Fifth, a genuine green claim is more likely to be verified by a (genuine) third party.

Combatting greenwashing

Having identified greenwashing, what options are available? There are a number of regulators which may take an interest.

For example, the Advertising Standards Authority (ASA) fairly regularly upholds greenwashing complaints against businesses. In June, the ASA upheld greenwashing-type complaints against (amongst others) Shell, Petronas, and Anglian Water. However, the ASA’s enforcement powers are (very) limited. And while the ASA can refer serial offenders to Trading Standards, it is not clear how often this is done.

The CMA is, in principle, more suited to broad regulatory intervention. It is currently reviewing environmental claims in the fashion sector and investigating ASOS, Boohoo, and Asda. But at least at present, it seems that its investigations are fairly narrow and slow moving.

Where a greenwashing claim is made in an industry subject to a specific ombudsman or regulator, they may also intervene. But the reality is that most regulators are under-resourced and overstretched.

Unfortunately, where regulators are unable or unwilling to step in, the prospects of successful private civil litigation appear to be (currently) fairly limited in most scenarios. For a start, there is a lack of clarity with many green terms, so that a defendant may be able to successfully argue that an assertion is merely vague rather than misleading. And further, under English law most private law remedies require proof of loss suffered by the claimant, with the award generally being limited to that amount rather than there being a punitive sanction, or an award based on the harm caused to society more generally. This is unhelpful in environmental claims where individual harm is small, but societal harm is large. And a business might well consider the best way to maximise its profit is to pollute and obfuscate, and (if caught) simply compensate the small number of claimants for their small loss, and pocket any surplus. Unless representative actions, opt-out class actions, and exemplary damages are developed through the case law, it will still pay for companies to dissemble about the extent to which their activities are contributing to environmental damage.

Reason for hope

Greenwashing is therefore a thorny problem. However, there is reason for hope. Fundamentally, greenwashing is (at least arguably) less about the environment, and more about market distortions and investor protection. Seen in that light, there may well be a political appetite to tackle it which is lacking in environmental matters more generally. Further, regulators worldwide are increasingly alive to its dangers, and (albeit more gradually) so are consumers. And, finally, although there are difficulties with private civil litigation at the moment, it is the sort of area where creative litigation might well persuade a court that the peculiar difficulties thrown up require innovative solutions.