Global Regulatory Actions and Enforcement on Greenwashing

The SEC is intensifying scrutiny on ESG-related disclosures, mandating that public companies report climate-related risks and emissions data in a consistent, auditable format.

Keurig Dr. Pepper: The SEC settled an enforcement case focusing on the company's disclosures about the recyclability of its K-Cup pods, highlighting the importance of complete and accurate environmental claims. 

WisdomTree Asset Management: Faced charges for failing to adhere to its own ESG investment criteria in certain ETFs, leading to a settlement with the SEC. 

States like New York are actively pursuing greenwashing cases, focusing on general statements that may mislead consumers about environmental practices. 

Adopted in 2024, this directive aims to strengthen consumer rights by requiring that environmental claims be substantiated with scientific evidence and prohibits vague or misleading terms like "sustainable" or "eco-friendly" without proper justification.

Set to apply from September 27, 2026, this directive will ban generic environmental claims based solely on greenhouse gas emissions offsets unless they are substantiated with precise metrics and verified data. 

Effective from May 31, 2024, this rule requires FCA-authorized firms to ensure that sustainability claims are clear, fair, and not misleading, with adequate substantiation. 

The CMA has been granted new enforcement powers under the Digital Markets, Competition and Consumers Act 2024, allowing it to impose fines of up to 10% of global turnover for noncompliance with greenwashing regulations. 

ASIC has taken significant steps against greenwashing, including imposing a penalty of AUD 12.9 million on an investment firm for misleading ESG claims. 

In September 2024, ASIC achieved its largest penalty to date for greenwashing in court action against Vanguard Investments Australia concerning claims about the ESG credentials of one of its funds. 

Canada has amended its Competition Act to directly target greenwashing, requiring that environmental claims be based on adequate testing using internationally recognized methodologies before public dissemination. 

In June 2024, the court ruled that companies using terms like "climate neutral" in advertising must define what the term means, as such phrases are too vague and potentially misleading. 

Norway's consumer ombudsman has enforced strict advertising guidelines, targeting automakers who claim their cars are "green," "clean," or "environmentally friendly," requiring substantiation for such claims. 

The South African Advertising Regulatory Board found that TotalEnergies' campaign with SANParks was misleading regarding their commitment to sustainable development, marking a significant precedent in greenwashing enforcement in the country.