What You Say About Sustainability Now Carries Legal Consequences

Quick Read

Green claims about environmental performance and sustainability commitments are now subject to strict regulatory scrutiny across major economies, with studies showing that 42–50% of corporate sustainability claims are exaggerated, false, or unsubstantiated. Regulators have concluded that misleading claims deceive consumers, distort capital markets, and undermine confidence in the sustainability transition, making intent irrelevant under consumer protection law. Organizations must adopt rigorous processes to ensure all sustainability claims—whether on websites, reports, or marketing materials—are accurate, substantiated, and legally defensible before publication.

Executive Summary

Green claims — statements about environmental performance, sustainability commitments, carbon neutrality, net zero targets, or climate action — have proliferated across corporate websites, annual reports, investor presentations, product brochures, and social media channels. For most of the past decade, these claims existed in a largely unregulated space. That era is over.

Regulators across Europe, North America, Asia-Pacific, and beyond have concluded that unsubstantiated and misleading sustainability claims cause real harm: they deceive consumers, distort capital markets, and undermine confidence in the broader sustainability transition. The regulatory and legal frameworks that have emerged in response are significant, fast-moving, and carry material consequences for non-compliance.

This whitepaper has three purposes:

• To explain why the regulatory environment has changed and what is driving it.

• To identify which types of claims, in which channels, carry the greatest risk.

• To outline the principles and processes that organisations need to adopt to ensure their claims are accurate, substantiated, and defensible.

Key Message

Green claims are no longer a marketing matter. They are a governance, legal, and assurance matter — and they need to be treated as such before publication, not after.

1. The Greenwashing Problem and Why Regulators Acted

Greenwashing — the practice of making environmental claims that are false, misleading, unsubstantiated, or disproportionate — has been documented extensively across industries. Studies by the European Commission, the UK Competition and Markets Authority (CMA), and the International Consumer Protection and Enforcement Network have consistently found that a significant proportion of green claims made by companies cannot be substantiated.

A 2021 European Commission study found that 42% of green claims examined online were exaggerated, false, or deceptive. A subsequent sweep found that more than half of surveyed websites contained at least one practice that could constitute a misleading green claim under existing consumer protection law — before any new green claims legislation had been enacted.

These findings reflect a broader pattern: as sustainability became a reputational and commercial asset, the incentive to make ambitious claims outpaced the rigour applied to verifying them. Marketing teams, under pressure to communicate ESG credentials, published claims that legal, compliance, and sustainability functions had not reviewed or approved. Data was selectively presented. Terminology was used loosely. Aspirational targets were framed as current reality.

The Core Problem

Most greenwashing is not deliberate deception. It is the predictable result of claims being made without adequate review processes, clear accountability, or independent verification. The law does not distinguish between intentional and negligent misleading conduct.

1.1 Why "We Didn't Intend to Mislead" Is Not a Defence

Consumer protection law in most jurisdictions operates on an objective standard. A claim is misleading if it is likely to mislead the average consumer — regardless of the intent of the organisation that made it. This is a critical point that many legal and compliance teams have underestimated.

An organisation that publishes a claim it genuinely believed to be accurate, but which was not substantiated by underlying data, still faces liability if that claim was misleading in effect. The question regulators and courts ask is not: did you intend to mislead? The question is: could a reasonable person be misled by this claim?

This shifts the burden significantly. It is no longer sufficient to have a good-faith belief that a claim is accurate. Organisations need to be able to demonstrate, at the point of publication, that the claim was accurate, substantiated, and proportionate.

1.2 The Shift From Voluntary to Mandatory

Until recently, sustainability disclosures — and the claims derived from them — were largely voluntary. Organisations chose whether to report, what to report, and how to frame it. The standards that existed (GRI, TCFD, CDP) were largely reporting frameworks, not verification regimes.

The shift to mandatory disclosure regimes — the EU's Corporate Sustainability Reporting Directive (CSRD), the ISSB sustainability standards (IFRS S1 and S2), and similar requirements emerging in Australia, Singapore, the UK, and the United States — has fundamentally changed this dynamic. When sustainability data becomes a regulated disclosure, claims derived from that data carry the same legal weight as any other regulatory disclosure. Inconsistency between what an organisation says publicly and what it discloses formally becomes a compliance failure, not just a communications issue.

2. The Regulatory Landscape: What Is Now in Force

Green claims regulation is now a global phenomenon. While the specific rules differ by jurisdiction, the direction of travel is consistent: claims must be accurate, specific, substantiated, and independently verifiable. The following table summarises the key frameworks organisations operating internationally need to be aware of.

2.1 The EU Green Claims Directive: A Global Standard Setter

The EU Green Claims Directive, which progressed through legislative adoption from 2023 and is being implemented by member states, represents the most comprehensive green claims regulatory regime enacted to date. Its significance extends well beyond Europe: any organisation that sells into the EU market, operates EU subsidiaries, or is subject to EU law will need to comply — including many organisations headquartered in Asia-Pacific, the Americas, and the Middle East.

The Directive prohibits a specific and expanding list of commercial practices, including:

• Generic environmental claims ('eco-friendly', 'green', 'sustainable', 'natural', 'biodegradable') unless accompanied by specific, substantiated evidence.

• Claims based on carbon offsetting schemes that present an overall neutral, reduced, or positive impact on the environment.

• Sustainability labels that are not based on approved or publicly endorsed certification schemes.

• Claims about future environmental performance that are not supported by clear, measurable commitments and verified implementation plans.

Violations carry significant penalties, including fines of up to 4% of annual turnover in the relevant member state, and the possibility of public naming and a prohibition on further use of the claim.

2.2 The UK's Approach: Existing Law With Active Enforcement

The United Kingdom has taken a different legislative path. Rather than enacting a standalone green claims statute, UK regulators have applied existing consumer protection and financial services law to greenwashing conduct — with notable vigour.

The CMA published its Green Claims Code in 2021, establishing a six-point test that green claims must meet to be compliant: claims must be truthful and accurate, unambiguous, substantiated, relevant, use fair and meaningful comparisons, and consider the full life cycle of the product or service. The CMA has since pursued enforcement actions across multiple sectors.

In financial services, the FCA's anti-greenwashing rule — which came into force in May 2024 — requires all FCA-regulated firms to ensure that sustainability-related references in any communication are fair, clear, and not misleading. This rule applies regardless of whether the communication is directed at retail or professional investors, and regardless of whether it appears in a prospectus, a fund factsheet, a website, or a LinkedIn post.

2.3 Enforcement Is Real and Escalating

Regulatory guidance is not aspirational. Enforcement actions taken in the past two years demonstrate that regulators are prepared to act, and that the consequences are significant:

• The CMA in the UK pursued an investigation into ASOS, Boohoo, and George (Asda) over unsubstantiated sustainability claims in their fast fashion ranges, resulting in undertakings and formal changes to the companies' claims practices.

• The Australian Securities and Investments Commission (ASIC) brought Federal Court proceedings against Mercer Superannuation for alleged greenwashing in relation to sustainability-related investment product claims.

• In the Netherlands, the Amsterdam Court of Appeal ruled that KLM's 'Fly Responsibly' campaign was misleading under existing consumer protection law, ordering the campaign withdrawn.

• The US FTC has signalled a significant update to the Green Guides that will increase scrutiny of carbon neutral and net zero claims in particular.

These are not outlier cases. They represent a pattern of regulatory posture that is becoming the global norm.

3. Which Claims, in Which Channels, Are at Risk

A common misconception is that green claims regulation applies primarily to product labels or formal sustainability reports. In practice, the scope of regulated claims is substantially broader. Any communication — regardless of channel or format — that makes an environmental claim about a product, service, or organisation can fall within scope.

3.1 Corporate Websites

Corporate websites are among the highest-risk channels for unsubstantiated green claims. Content is publicly accessible, often not subject to the same legal review as formal disclosures, and frequently updated by marketing and communications teams without involvement from legal or sustainability functions.

Common problem areas on websites include:

• Homepage environmental commitments ('committed to a net zero future', 'building a sustainable business') without specificity or substantiation.

• Sustainability pages that present aspirational targets as current achievements.

• Product or service descriptions that claim environmental benefits without life-cycle data or third-party verification.

• Award, certification, or accreditation claims that are outdated, misrepresented, or applied to a broader scope than the original certification covers.

• Supply chain sustainability claims that are not supported by supplier-level data or verification.

Watch Point

Website content is archived by regulators and third parties. A claim that was removed after a regulatory inquiry was raised is still evidence of the original publication. 'We updated the website' is not a defence.

3.2 Investor Communications and Annual Reports

The risk profile in investor-facing communications is particularly acute, because in addition to consumer protection law, securities and financial services regulation may apply. Claims in annual reports, investor presentations, sustainability reports, earnings calls, and ESG investor briefings are subject to:

• Requirements for accuracy and non-misleading disclosure under securities law.

• The anti-greenwashing rules of financial services regulators (FCA, MAS, ASIC, SEC).

• Potential liability for statements that materially affect investment decisions and are later found to be inaccurate or unsubstantiated.

The integration of sustainability disclosures into mainstream financial reporting — as required under CSRD, IFRS S1/S2, and equivalent national regimes — means that the same level of rigour applied to financial statements must now be applied to sustainability claims within those documents.

3.3 Marketing Materials, Brochures, and Advertising

Traditional advertising and marketing materials — brochures, pitch decks, product catalogues, point-of-sale materials, trade exhibition displays — are covered by advertising standards and consumer protection law in every major jurisdiction. The general principles are consistent: claims must be truthful, substantiated, and not misleading.

In practice, marketing materials often originate from brand or marketing teams and are reviewed primarily for commercial and design considerations. The absence of legal and sustainability input in the review process creates significant risk. Terms such as 'sustainable packaging', 'green product', 'carbon-reduced', or 'environmentally responsible' require substantiation and, in many cases, qualification.

3.4 Social Media and Executive Communications

Social media posts, CEO statements, ESG-related LinkedIn content, and press releases are increasingly within the scope of green claims regulation. The FCA's anti-greenwashing rule, for example, applies to any communication made in connection with a financial product or service — including social media posts by regulated entities.

Executive communications present particular risk because they are often made quickly, without formal review processes, and with significant public reach. A CEO's public commitment to a sustainability target can create a legal obligation if it is later found to be unsubstantiated or not achievable.

4. The Risks of Getting It Wrong

The consequences of publishing unsubstantiated or misleading green claims operate across multiple dimensions simultaneously. Organisations that have not established robust pre-publication review processes are exposed to all of the following.

4.1 The Financial Dimension

The financial consequences of green claims enforcement are not limited to regulatory fines. The indirect costs — legal defence, management time, reputational remediation, rebranding of non-compliant materials, and potential loss of ESG-labelled investment mandates — can significantly exceed the direct penalty.

More significantly, organisations that are found to have made unsubstantiated green claims face scrutiny of their broader sustainability posture. An enforcement finding in one area frequently triggers requests for assurance and verification across all sustainability communications. Investors, customers, and rating agencies revise their assessments. ESG scores are recalculated. The cascading effect of a single non-compliant claim can be disproportionate to the claim itself.

4.2 The Governance Dimension

Directors and senior executives are increasingly personally accountable for the accuracy of sustainability disclosures. Under the CSRD, the directors of in-scope companies are collectively responsible for ensuring the completeness and accuracy of the sustainability report. Under proposed corporate due diligence requirements in multiple jurisdictions, boards are expected to oversee the management of material ESG risks — including the risk of misleading claims.

This is not a theoretical liability. The trend across jurisdictions is toward director-level accountability for sustainability governance failures. Organisations that lack clear governance structures for approving green claims — including defined accountability, documented review processes, and audit trails — are exposing their boards to personal risk, not just corporate risk.

5. What Good Looks Like: Five Principles for Defensible Claims

Compliant, defensible green claims share common characteristics. The following five principles reflect the requirements of the major regulatory frameworks and provide a practical framework for assessing whether a claim is publication-ready.

Accuracy: The claim reflects current reality, not aspiration

Every green claim must be accurate at the time of publication. Aspirational language that frames future targets as current achievement, or that uses present tense to describe planned rather than implemented actions, creates immediate compliance risk. If an organisation is working toward net zero, the claim should say so — not imply it has already been achieved.

Specificity: The claim is precise about what it covers and what it does not

Vague claims — 'sustainable', 'green', 'eco-friendly', 'environmentally responsible' — are high-risk precisely because they invite a broad interpretation that the underlying evidence may not support. Defensible claims are specific: they name the metric, the scope, the time period, and the basis for measurement. 'This product's manufacturing carbon footprint has been reduced by 32% since 2019, based on Scope 1 and 2 emissions measured against our 2019 baseline' is a defensible claim. 'Our products are greener' is not.

Substantiation: The claim is supported by documented evidence

Every green claim must be supported by underlying data, methodology documentation, and where applicable third-party verification. This evidence must exist before the claim is published — not be assembled after a regulatory inquiry. The type of evidence required will depend on the nature of the claim: emissions claims require measured data and recognised methodology; certification claims require current, in-scope certificates; supply chain claims require supplier-level data.

Proportionality: The claim does not overstate the environmental benefit

Regulatory frameworks consistently require that claims be proportionate to the actual environmental benefit. A claim that a product is 'made from recycled materials' when only 10% of its content is recycled is potentially misleading, even if technically accurate. Claims must not selectively highlight positive environmental attributes while omitting material negative attributes. Life-cycle thinking is increasingly required: a claim that focuses only on one stage of a product's environmental impact while ignoring others may be disproportionate.

Governance: The claim has been approved through a documented review process

Defensible claims are the product of a governance process that includes legal review, sustainability data verification, and — in high-risk cases — independent external assurance. The organisation can demonstrate who approved the claim, on what basis, and when. This audit trail is not just good practice: it is increasingly a regulatory requirement and the primary means of demonstrating due diligence in the event of an inquiry.

6. Building a Claims Review Process

The five principles above require operationalisation. An organisation that has sound sustainability data but no structured process for reviewing claims before publication is still exposed. The following elements are essential to a functioning green claims governance framework.

6.1 Claims Inventory and Classification

The first step is to understand the scope of the problem. Most organisations do not have a comprehensive inventory of the green claims they make across all channels. Building that inventory — cataloguing claims by channel, content type, claim category, and supporting evidence — is foundational to managing compliance risk.

Once inventoried, claims should be classified by risk level. Claims that are specific, quantified, and based on third-party verified data carry lower risk. Claims that are generic, broad-scope, or qualitative carry higher risk and require greater scrutiny.

6.2 Pre-Publication Review

No green claim should be published without a structured pre-publication review. At minimum, this review should include:

• Legal review for compliance with applicable consumer protection, advertising standards, and financial services regulation.

• Sustainability / technical review to verify that the claim is accurate, specific, and supported by underlying data.

• Sign-off from a named individual with clear accountability for the claim.

• Documentation of the review, the evidence relied upon, and the approval.

For high-stakes claims — net zero commitments, carbon neutrality claims, supply chain sustainability claims, claims in investor-facing documents — independent external review should be considered standard practice rather than an optional enhancement.

6.3 Periodic Review of Published Claims

Claims are not static. Underlying data changes. Business activities change. Regulatory requirements evolve. A claim that was accurate and compliant when published may become inaccurate or non-compliant over time. Organisations need processes to periodically review published claims — particularly on websites and in standing marketing materials — to ensure continued accuracy and compliance.

6.4 Governance and Accountability

Clear accountability is essential. Who in the organisation owns green claims compliance? Who has authority to approve claims in different categories and channels? How does that person or function engage with marketing, communications, legal, and sustainability teams? These are governance design questions that need to be answered explicitly, not assumed.

In larger organisations, a cross-functional green claims review committee — with representation from legal, sustainability, communications, and relevant business lines — provides the governance architecture needed to manage this risk systematically.

7. The Case for Independent Review and Assurance

The principles and processes outlined above require expertise, time, and ongoing investment. For many organisations — particularly those without large in-house legal and sustainability functions — building and maintaining that capability internally is not realistic. Even for organisations with those resources, independent external review provides a level of objectivity and defensibility that internal review alone cannot.

This is where independent review and assurance becomes not just a best practice but a strategic necessity. When a regulatory inquiry is raised or a claim is challenged, the organisation that can demonstrate that its claims were reviewed by an independent third party, against a defined methodology, is in a materially stronger position than one that cannot.

Independent review of green claims provides:

• An objective, expert assessment of whether a claim is accurate, specific, substantiated, and proportionate.

• Identification of high-risk claims that require amendment, qualification, or withdrawal before publication.

• Documentation of the review process that can be produced as evidence in the event of regulatory scrutiny.

• Ongoing monitoring as regulatory requirements evolve across jurisdictions.

• Board-level confidence that sustainability communications meet the standard required by regulators, investors, and customers.

Speeki Green Claims Review

Speeki is an ISO-accredited ESG assurance and certification body operating across more than 100 countries. We have developed a dedicated Green Claims Review subscription service designed to give organisations ongoing access to expert, independent review of their sustainability claims before publication.

The service covers all claim types and channels — websites, investor communications, marketing materials, annual reports, product labels, and executive communications — and is calibrated to the regulatory requirements of the jurisdictions in which each client operates.

Because Speeki is an assurance body and not a consulting firm, our review is fully independent. Speeki does not provide consulting services to any organisation — not just to clients we assure. We have no advisory or implementation practice. Our sole function is independent assurance and certification, and that structural independence is what gives our review opinions their value.

To learn more about Speeki's Green Claims Review service, visit speeki.com or contact our team.

Conclusion

The transition from voluntary to regulated sustainability claims is one of the most significant governance shifts affecting corporate communications in a generation. Organisations that treat green claims as a marketing matter — governed by brand guidelines rather than legal and compliance frameworks — face a materially different risk environment today than they did three years ago.

The question is not whether an organisation makes green claims. Almost every organisation that engages with sustainability topics in any public forum makes green claims of some kind. The question is whether those claims are accurate, specific, substantiated, proportionate, and approved through a governance process that can withstand regulatory scrutiny.

The cost of getting this right is manageable. The cost of getting it wrong — in regulatory fines, legal defence, reputational damage, and the loss of hard-earned ESG credibility — is not.

The Governance Test

Before any sustainability claim is published, ask: if a regulator reviewed this claim tomorrow, could we demonstrate the evidence that supports it, the process by which it was reviewed, and the person who approved it? If the answer is no, the claim is not ready to publish.

About Speeki

Speeki is an ISO 17021-1 accredited ESG assurance and certification body, operating across more than 100 countries with offices in Singapore, the United Kingdom, and France. Speeki provides independent ESG assurance, sustainability certification, and governance advisory services to organisations across all sectors and geographies. Speeki's accreditation is granted by COFRAC (France) and ANAB (North America), and the firm holds certification body status under multiple ISO management system standards.

Speeki operates on a strict independence model. Speeki is not a consulting firm and does not provide advisory or implementation services to any organisation. Our exclusive focus is independent assurance and certification — a structural independence that underpins the credibility of every opinion we issue.

Speeki's accreditation numbers and full accreditation scope details are available on our website at speeki.com.

For enquiries regarding Speeki's Green Claims Review service or ESG assurance more broadly, contact us at speeki.com.

This whitepaper is provided for general informational purposes only. It does not constitute legal advice. Organisations should obtain specific legal and regulatory advice relevant to their jurisdiction and circumstances before relying on the information contained in this document.

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