How to Spot Greenwashing in 2026 (and What to Look for Instead)

By GreenFi Editorial Team

Every brand wants to be “sustainable” now. Walk down any grocery aisle or scroll through any online store and you’ll see words like “eco-friendly,” “green,” “conscious,” and “planet-positive” on everything from laundry detergent to bank accounts.

The problem? A lot of it is meaningless. A 2021 European Commission study found that among traders making environmental claims, 20% were insufficiently substantiated and 28% were false or deceptive.^¹ And the problem hasn’t gone away. RepRisk’s 2024 analysis found that while overall greenwashing incidents dipped for the first time in six years, high-severity cases surged by over 30%.^² In other words, companies are getting more sophisticated about misleading you, not less.

If you care about the environment and want your money to actually make a difference, knowing how to spot greenwashing is one of the most valuable skills you can develop.

What greenwashing actually is

Greenwashing is when a company makes environmental claims that are misleading, exaggerated, or flat-out false to make their products or brand appear more sustainable than they really are. It can be as blatant as slapping a “100% natural” label on a product full of synthetic chemicals, or as subtle as a bank promoting a “green initiative” while quietly lending billions to fossil fuel companies.

A KPMG UK survey found that 76% of consumers consider false or misleading sustainability claims to be the clearest example of greenwashing.^³ And 52% of people globally say they’ve encountered misleading information about a company’s sustainability actions.^⁴

Five red flags to watch for

1. Vague language with no specifics. Words like “eco-friendly,” “sustainable,” “green,” and “conscious” sound good but mean nothing without specific, measurable claims behind them. If a company says their product is “better for the planet” but can’t tell you exactly how or by how much, that’s a red flag.

2. No third-party verification. Legitimate sustainability claims are backed by independent certifications. If a company created its own “green” label or logo but it isn’t verified by a recognized third party, be skeptical. Look for certifications from established organizations (more on that below).

3. One small good thing hiding a bigger bad thing. This is one of the most common tactics. A company might highlight a single sustainable product line while the rest of their business does serious environmental damage. A bank might promote a tree-planting initiative while lending billions to oil and gas companies. The green story is real, but it’s covering for a much larger problem.

4. “Carbon neutral” claims based entirely on offsets. The EU is cracking down on this one. Starting September 2026, companies will no longer be allowed to market products as “climate neutral” or “carbon neutral” if those claims are based solely on purchasing carbon offsets rather than actually reducing emissions.^⁵ If a brand’s entire climate strategy is buying offsets while continuing to pollute, that’s not sustainability. It’s accounting.

5. No data, no transparency, no receipts. Real sustainability is measurable. Companies that are serious about it publish their data: carbon footprints, emissions reduction targets, progress reports, where their money goes. If a brand makes big environmental promises but you can’t find any data to back them up, you have your answer.

What to look for instead

If greenwashing is the disease, transparency is the cure. Here are the signals that a company is walking the walk:

Third-party certifications that actually mean something. Not all certifications are created equal, but a few carry real weight. B Corp certification means a company meets rigorous social and environmental performance standards verified by an independent nonprofit. 1% for the Planet means a company donates at least 1% of annual revenue to environmental causes. Climate Label certification means a company’s climate claims have been independently verified. These aren’t marketing badges. They’re accountability structures.

Published impact data. Look for specific numbers, not promises. How many tons of carbon have they avoided? What percentage of their deposits are fossil-fuel free? How many acres of farmland have they helped transition to regenerative practices? Specificity is the enemy of greenwashing.

Honest language about what they can’t do. Companies that are serious about sustainability tend to be honest about their limitations. If a brand says “This isn’t a perfect solution, but it’s a meaningful step,” that’s usually a sign you’re dealing with someone who takes this seriously. Greenwashers, by contrast, make everything sound like they’ve already saved the world.

Alignment between the core business and the sustainability claim. The strongest sustainability stories come from companies where the environmental benefit is built into the product itself, not bolted on as a marketing campaign. A bank that keeps deposits out of fossil fuels is fundamentally different from a bank that funds oil companies but sponsors a beach cleanup.

Why this matters for your money

Greenwashing isn’t just annoying. It’s harmful. When companies make false environmental claims, it erodes trust in the entire sustainability movement. Research shows that greenwashing leads consumers to become skeptical of all green products, even the legitimate ones.^⁶ That skepticism then reduces people’s willingness to seek out sustainable options, which slows down the whole transition.

This is especially true in banking. The financial sector saw greenwashing incidents increase by 70% between 2022 and 2023.^⁷ Major banks have been caught promoting climate commitments while dramatically increasing their fossil fuel lending. The 2025 Banking on Climate Chaos report found that the world’s 65 biggest banks committed $869 billion to fossil fuels in 2024 alone.^⁸

If you want your money to genuinely make a climate difference, you need to look past the marketing and ask: Where does my money actually go?

The bottom line

Greenwashing is getting more sophisticated, not less. But so are consumers. By learning to spot vague claims, looking for third-party certifications, and demanding real data, you can cut through the noise and put your money behind companies that are actually doing the work.

Want a bank that’s transparent about where your money goes? GreenFi^† is a 1% for the Planet member, and Climate Label Certified. Your deposits stay out of fossil fuels, and you can track your climate impact right in the app.

Frequently Asked Questions

What is greenwashing?

Greenwashing is when a company makes environmental claims that are misleading, exaggerated, or false in order to appear more sustainable than they really are. It can range from vague “eco-friendly” labeling to highlighting a small green initiative while the core business causes significant environmental harm.^¹

How common is greenwashing?

Very. A European Commission study found among traders making environmental claims, 20% were insufficiently substantiated and 28% were false or deceptive.^¹ RepRisk reported that while overall greenwashing cases dipped in 2024, high-severity cases increased by more than 30%.^²

What certifications should I look for to avoid greenwashing?

Look for independent, third-party certifications like B Corp (social and environmental performance standards), 1% for the Planet (donates 1% of revenue to environmental causes), and Climate Label (verified climate claims). These are accountability structures, not marketing badges.

Is greenwashing illegal?

Increasingly, yes. The EU’s Empowering Consumers for the Green Transition Directive takes effect in September 2026, banning generic green claims and offset-based “carbon neutral” marketing.^⁵ The UK can now impose fines of up to 10% of worldwide annual turnover for misleading environmental claims.^⁹

How do banks greenwash?

Banks may promote small sustainability initiatives or climate pledges while continuing to lend billions to fossil fuel companies. The most reliable way to check is to look at where the bank actually puts its money. The Banking on Climate Chaos report tracks this data for the world’s largest banks.^⁸

Sources

¹ European Commission. Screening of Websites for Greenwashing: Half of Green Claims Lack Evidence. (2021). https://commission.europa.eu/live-work-travel-eu/consumer-rights-and-complaints/enforcement-consumer-protection/sweeps_en

² RepRisk. Annual Greenwashing Report 2024: High-Severity Cases Surge 30%+. (2024). Referenced in Adopter, 45 Greenwashing Statistics You Need to Know in 2026. https://www.adopter.net/knowledge-hub/45-greenwashing-statistics-you-need-to-know-in-2026

³ KPMG UK. 76% of Consumers Identify Misleading Sustainability Claims as Greenwashing. (2023). Referenced in Adopter, 45 Greenwashing Statistics You Need to Know in 2026. https://www.adopter.net/knowledge-hub/45-greenwashing-statistics-you-need-to-know-in-2026

⁴ Kantar. Mistrust and rejection: The impact of greenwashing and social washing on brands. (2023) https://www.kantar.com/inspiration/sustainability/the-impact-of-greenwashing-and-social-washing-on-brands

⁵ Gasilov Group. EU Green Claims Directive Withdrawn: Why Greenwashing Risk Is Higher in 2026. (Mar 2026). https://www.gasilov.com/insights/green-claims-directive-withdrawal-greenwashing-enforcement-2026

⁶ Hossain, Muhammed Zakir & Hossain, Sahib & Urme, Umma. (2025). The Impact of Greenwashing on Consumer Trust and Brand Loyalty: The Moderating Role of Industry Type. European Journal of Innovative Studies and Sustainability. 1. 121-133. 10.59324/ejiss.2025.1(3).10. https://www.researchgate.net/publication/391645894

⁷ Zippia. 20+ Shocking Greenwashing Statistics. (2023, updated). https://www.zippia.com/advice/?p=63839

⁸ Banking on Climate Chaos 2025 Report. Rainforest Action Network, Sierra Club, BankTrack, et al. (Jun 2025). https://www.bankingonclimatechaos.org/

⁹ Gasilov Group. UK CMA fines up to 10% worldwide turnover under Digital Markets, Competition and Consumers Act. (Mar 2026). https://www.gasilov.com/insights/green-claims-directive-withdrawal-greenwashing-enforcement-2026

Disclosures

† GreenFi is a financial technology company, not an FDIC-insured bank. Banking Services provided by Coastal Community Bank, Member FDIC. The GreenFi Debit Mastercard® is issued by Coastal Community Bank, Member FDIC, pursuant to a license by Mastercard International Incorporated. FDIC insurance only covers the failure of an FDIC-insured bank. FDIC insurance is available through pass-through insurance at Coastal Community Bank, Member FDIC, if certain conditions have been met.