In 2023, the FTC sent warning letters to dozens of companies over potentially deceptive environmental claims. In 2024, enforcement actions increased. For e-commerce brands, the message is clear: greenwashing isn't just an ethical issue—it's a legal and financial risk.
What Counts as Greenwashing?
Greenwashing isn't always intentional deception. Often, it's well-meaning brands making claims they can't substantiate. Common examples include:
- Vague claims: "Eco-friendly," "green," or "sustainable" without specifics
- Hidden trade-offs: Highlighting one green attribute while ignoring larger impacts
- No proof: Claims that can't be verified by third parties
- Irrelevant claims: Touting the absence of something that was never there
- Lesser of two evils: "Greener than competitors" when the whole category is problematic
The Financial Consequences
The costs of greenwashing go beyond potential fines:
- Legal fees: Defending against FTC actions or class-action lawsuits
- Settlements: Often in the millions for larger brands
- Reputation damage: Social media amplifies greenwashing callouts
- Lost customers: 88% of consumers say they'd stop buying from brands caught greenwashing
- Investor concerns: ESG-focused investors are increasingly scrutinizing claims
The FTC Green Guides: What You Need to Know
The FTC's Green Guides aren't law, but they outline how the FTC interprets deceptive environmental claims. Key principles:
- Claims should be clear, prominent, and understandable
- Qualifications should be clear and prominent
- Claims should be substantiated before making them
- "Carbon neutral" claims require reliable scientific evidence
- Offset claims should disclose if emissions were reduced vs. offset
How to Protect Your Brand
The good news: avoiding greenwashing isn't complicated. It just requires discipline:
- Be specific: "We offset shipping emissions" beats "We're eco-friendly"
- Show your work: Link to methodology, publish your numbers
- Use qualifiers: "Estimated," "approximately," "based on" where appropriate
- Stay in scope: Don't claim more than you're actually measuring
- Update regularly: Stale claims become inaccurate claims
The Opportunity in Honesty
Here's the thing: consumers don't expect perfection. They expect honesty. A brand that says "We're working on reducing our shipping emissions—here's our progress" is more trustworthy than one claiming to be "100% sustainable."
The brands that will thrive are those that treat sustainability as a journey, communicate transparently about where they are, and show genuine progress over time. That's not just good ethics—it's good business.