The reputation-washing trap: why credibility is the new currency for sustainability leaders (includes greenwashing risk checklist + resources)

Being a ‘sustainable’ company is now both a reputational risk and a brand opportunity. The difference is in how you communicate.

Exec summary: why it’s critical to assess your say-do gap

• Regulation is tightening for consumer- and investor-facing information as disclosure frameworks intensify.
• Real-world climate action is accelerating, and the bar for companies is higher.
• Supply chain and misinformation risks are rising, and stakeholders want reassurance.

What to do: review the guidelines and integrate a ‘de-risk gate’ into production workflows — assess verbal claims and visuals/design.

Download the guide >>

The compounding competitive advantage of credibility

The moment we reach for a product with a sustainability promise, something subtle happens. We feel lighter, calmer — as if that single act has tipped the scales toward doing good. This is not just marketing; it’s biology. We’re wired to seek the reward of doing the right thing — the belief, and the hope, that the right choice, even if it costs more, restores a sense of balance between what we want, and what we value.

Despite cost-of-living pressures, consumers are choosing to pay a premium for products considered more sustainable than their competitors. But the bar for what “sustainable” means has been raised, and scrutiny is tighter. Robust sustainability claims can boost credibility, trust, preference, and pricing power; vague or exaggerated claims can invite regulatory or stakeholder scrutiny, political blowback, and erosion of brand value.

In its 2022 internet sweep, the ACCC reported that almost 60% of 247 businesses made environmental claims that raised ‘concerns’^[1] — and it will be “conducting further analysis of these issues and will undertake enforcement, compliance, and education activities where appropriate”.

With new rules in play and higher stakes, there’s never been a better time to add an integrity gate that assesses your say-do gap.

The risk environment is intensifying — rigor is non-negotiable

As global debate over ESG regulation and enforcement unfolds, companies are caught in the crossfire: policy goalposts keep shifting; stakeholder scrutiny is intensifying; and fines and enforcement are snowballing. Policy, politics, and perception are volatile.

For example, in the EU, sustainability rules are shifting among political negotiation^[2], voluntary carbon markets are evolving^[3], green claims regulations (GCD) have been withdrawn, and due diligence obligations remain in flux. This risks exposing brands that over-claim^[4] as the goalposts move, or “greenhushing” as companies fearing backlash carry a different kind of transparency risk. In Australia, climate and energy targets are political ammunition that erode trust and stall progress^[5], making communication missteps costly to taxpayers and the environment.

Across key markets, regulators have shifted from guidance to action. This is where enforcement and standards that require metrics and targets are pushing sustainability claims to a level of provable performance, beyond marketing or policy intent.

Real-world action is ramping up as the bar for companies is raised

As sustainability and climate targets across OECD countries draw nearer, they need significant investment and action to achieve progress. Despite geopolitical challenges, overall, the pace is accelerating: Carbon Capture and Storage (CCS) technologies and systems are scaling^[6], and global clean-energy capital flows are expanding^[7]. As progress moves from planning to implementation, expectations on corporate and consumer claims rise.

Supply-chain volatility and the new perils of doing business

Even a small business can have complex supply logistics that rely on a delicate web of material extraction and sourcing; manufacture and transport; and sales and distribution.

Climate shocks, war and tariffs are disrupting supply and trade^[8], adding to COVID-era pressure on supply chain economics and even disrupting the very materials we need for the energy transition^[9]. As social and political divisions deepen, it becomes harder to work towards common goals and for organisations to transparently track what’s happening up- or downstream. The spread of misinformation, disinformation and societal polarisation remain key risks to eroding trust^[10]. In this environment, finding the path to sustainability is murky, but communicating it transparently becomes paramount.

What to do about it?

Some companies will continue to deceive consumers and investors for financial and reputational gains, but stakeholders are ultimately seeking reassurance that businesses can take a sensible, long-term view. Hollow promises and hyperbole do not instil hope.

Research is showing that companies that publish measured, risk-aware communications (e.g. honest about trade-offs) are more likely to outperform on eco-efficiency.^[11]

To de-risk sustainability claims, start with what your audience understands — most greenwashing regulation falls under competition/consumer-protection law, advertising standards, and financial services/securities law. Framed from the reader’s perspective, the ask is this: would an ordinary, reasonable person be misled, and would the company benefit as a result?

The ACCC makes it very clear: “When deciding if conduct is misleading or deceptive, or if a representation is false or misleading, the most important question to ask is whether the overall impression created would be misleading to the ordinary and reasonable consumer.”^[12]

The ACCC’s Eight Principles for Trustworthy Environmental Claims

The ACCC’s guidelines offer a set of easy-to-understand guardrails. Their ‘eight principles for trustworthy environmental claims’ are:

1. Make accurate and truthful claims
   Don’t overstate facts in a claim — a factual statement can still mislead if framed poorly.
2. Have evidence to back up your claims
   Substantiate where you claim it, make the evidence accessible, use accepted methodologies and don’t overstate certifications or schemes.
3. Do not hide or omit important information
   Ensure fine print supports the headline and doesn’t contradict or hide the truth. Segment the lifecycle where the claim applies.
4. Explain any conditions or qualifications on your claims
   Particularly “recyclable”, “biodegradable” etc. What conditions are required for the claim to be true?
5. Avoid broad and unqualified claims
   Terminology is critical, no vague generalisations; consider terms like “friendly”, “green” and particularly emissions-related claims.
6. Use clear and easy to understand language
   Use terms your ordinary audience can understand, and delineate scientific or technical meanings from common meanings.
7. Visual elements should not give the wrong impression
   Images, icons, symbols, trust marks and colours contribute to the impression of the product or service.
8. Be direct and open about your environmental sustainability transition
   Be honest about where you’re at in your sustainability maturity journey — plans and intentions alone don’t make claims.

Due to evolving disclosure requirements, financial services entities face additional complexities beyond general bans on deceptive conduct in the ASIC Act 2001 and Corporations Act 2001. ASIC’s Infosheet 271 outlines how to avoid greenwashing for sustainability-related financial products and investment strategies (including listed funds and green bonds). It details what to disclose so that claims are clear, accurate, and can be substantiated.

Further, the Australian Sustainable Finance Taxonomy from ASFI provides “a common standard for green and transition finance in Australia”, giving entities clearer assurance over sustainability claims and consistent, comparable information to users.

Greenwashing preflight checklist — use it in creative briefings, copy reviews, and sign-off gates.

1. Language and labels

• Plain English, measured wording: Messages are measured, considered and transparent information that can be substantiated, and don’t rely on bold, expansive or exaggerated language.
• No buzzwords without proof: Terms such as “green”, “eco-friendly”, “sustainable”, “climate-neutral” are defined in copy and backed by evidence (or removed).
• Jargon is defined: Particularly company- or brand-specific terms. “ESG integration”, “impact”, “ethical” include how the criteria are applied (screens, thresholds, % portfolio coverage).
• Name matches reality: Fund/product name, screens, holdings, and stewardship match what’s actually done.

2. Scope and specifics

• No haloing / scope inflation: Don’t imply whole-business performance when the claim applies only to a product, site, market, or pilot.
• Scope is explicit: The claim states what (product/line), where (market/geo), how much (% coverage/threshold), and which lifecycle stage(s) it covers.
• Limits and conditions sit alongside claims: Not buried on another page/frame/location. Comparisons should be fair and clearly defined.

3. Visuals and design

• Visuals don’t overstate reality: Visuals accurately represent portions of the business and don’t mislead about its activities (e.g. pictures of solar farms). This includes icons, photography, illustrations and other graphics. If not, swap, caption, or proportionately represent.
• Icons/labels aren’t misleading: Recycling arrows, leaves, and “badges” don’t imply certification or recyclability you don’t have.
• Sustainability labels are legitimate: Only use certified schemes; name the scheme and its scope.

4. Evidence and data

• Offsets don’t imply intrinsic performance: Offsets are an external accounting tool, not an inherent property of the thing you sell. If any claim depends on offsets, clearly say so (type, quality, coverage, year).
• Evidence exists now: Compile independent or internal data, dated and accessible (one click or QR) at time of publishing. Internal substantiation onus should be labelled.
• Method is stated: Use accepted methodology and state it (e.g., LCA scope); units, data vintage, and geography are disclosed in brief.
• Future-tense claims have grounds: Targets (e.g., “net zero 2030”) have a resourced plan, milestones, and governance you can show.

5. Consistency and governance

• Consistency across channels: Website, ad, PDS/report, pack copy, PR, and social don’t contradict each other.
• Sign-off captured: Brand/Creative, Sustainability/ESG, and Legal/Risk have signed off; owner, substantiator and review date are recorded.
• Update cadence set: A review date is on the page/asset/post/report (e.g., “Reviewed: 10/09/2025; next review: 10/12/2025”).
• Market rules checked: Understand the latest regulation updates in your jurisdiction. AU: ACCC, ASIC. NZ: Commerce Commission, ASA. HK: Trade Descriptions Ordinance, SFC ESG funds naming rules, HKEX ESG Code. SG: CPFTA, SCAP (ASAS), MAS retail ESG fund disclosure rules. EU: ECD, GCD (status evolving), CSDDD. UK: CMA and ASA/CAP. US: FTC Green Guides (update pending).

How to use this checklist with your team

1. Make it a production gate: add the checklist to your brief template (including marketing comms) and run a pre-flight before publishing. Include high-risk and low-risk terminology and images in company writing style or brand guidelines.
2. Connect substantiation: store evidence for every claim (method, data, date) and keep a record of owners and review dates. Treat claims as living content and assign accountability.
3. Scenario-test: If this hit the front page tomorrow and you were asked to substantiate it, could you?

If you want the templates, examples, and sign-off flows that we use with clients, download the Greenwashing Preflight Toolkit (editable checklists, visual do’s/don’ts, and claim–evidence worksheets).