Compliance told to focus on reality as Euro courts brace for slew of greenwashing cases

Richard Parlour, CEO of Financial Markets Law International and expert in “terracide” and financial crime, said the rise in legal action is not surprising given that greenwashing constitutes misrepresentation. The basic offense is not new.

He warned that environmental non-governmental organizations (NGOs) are bringing increasing numbers of cases to court, while social media enables individuals to create campaign groups and share their concerns. This makes it ever more likely that practices that do not align with a company’s stated environmental aims or reported activities will be publicised.

“More lawyers, PRs, journalists, and activists are watching and are keen to take cases forward,” Parlour said. “There are a massive number of new environmental cases taking off. Compliance must take note. For example, this could become a major issue for financial services organizations.”

At the same time, regulators are scrutinizing misleading advertising, under rules including the U.K. Advertising Standards Agency’s Codes of Practice and the EU’s Misleading and Comparative Advertising Directive, Parlour said.

New laws are adding to the prosecution’s arsenal. One important development was the advisory opinion from the International Court of Justice at the Hague in July that established that a healthy environment is a human right.

The penalties are also shifting, Parlour added. “As fines have increased in frequency and size, companies seem to be less concerned about reputational damage, because customers and share prices tend to come back.” However, he warned that companies might lose contracts if they get a reputation for greenwashing.

Evolving perceptions

Chris Jagger, director and co-founder at global anti-smuggling intelligence company Sentraviz, has worked with governments and global organizations, including the UN, Nato and wildlife conservation agency TRAFFIC, investigating links between environmental crime and financial crime. He said the debate around greenwashing evolved substantially in 2025.

“Greenwashing has captured the public imagination,” he said. This has influenced public policy makers and shaped the expectations of investors, companie,s and wider society. He believes this will lead to more accountability in the future.

“At COP 30, held in November, the UN explicitly highlighted the need to combat greenwashing and climate-change misinformation,” he pointed out. Shortly before this, the UN launched a global initiative for information integrity on climate change, which “emphasises that reliable, evidence-based information is essential for public trust, effective policies, and accountability.”

Katarina Pranjic, head of regulation and policy at LexisNexis Risk Solutions, agreed that “in 2025, there has been a steady tightening of regulatory attention on environmental claims.” 

“The U.K. Competition and Markets Authority (CMA) has new powers to fine under the Digital Markets, Competition and Consumers Act, and it has indicated that green claims remain an area of interest as these powers come into use,” she warned.

Pranjic added that the UK Financial Conduct Authority’s anti-greenwashing rule, which came into force in May 2024, has led to “closer supervisory focus on how sustainability information is presented,” although it has not yet led to enforcement action.

What to watch in 2026

“Going into 2026,” Pranjic advised, “the overall trend is towards more detailed scrutiny of environmental statements and a clearer expectation that firms can substantiate the claims they make. 

Jagger agreed that in 2026, companies should anticipate much deeper scrutiny of the evidence that underpins their environmental claims. A key challenge for compliance has been accurately judging an organization within the context of its operations, given “the ambiguity created by differing standards and inconsistent terminology across jurisdictions,” he said.

The most important question compliance teams can ask is “does this claim hold up within the reality of our operations, our environmental impact, and the expectations of the stakeholders who will interpret it, not whether it meets the rules,” Jagger said. 

Regulators will intensify their scrutiny of the evidence behind claims in 2026. They will focus on “the quality and reliability of data, the assumptions behind long-term commitments and the governance processes that determine how those commitments are communicated,” he advised. 

Key greenwashing cases in 2025

1. In April, Deutsche Bank’s investment arm DWS was fined €25 million(USD $27million) for misleading investors over its sustainable investing credentials. DWS admitted that “in the past our marketing was sometimes exuberant,” and said it had improved its internal documentation and control processes. The Frankfurt prosecutor said DWS’s claims to be a “leader” in ESG and its statement that “ESG is an integral part of our DNA,” created an impression that “did not correspond to reality.” The prosecutor added that “statements in external relations must not go beyond what can actually be implemented.” The case followed a previous investigation in May 22 when police raided the Frankfurt offices of DWS and Deutsche Bank. The US Securities and Exchange Commission (SEC) subsequently launched an investigation, and DWS agreed to pay a $19m fine in 2023.
   
   
2. In August, Chinese retailer Shein was fined €1million in Italy (USD $1.16 million) by the Italian Competition Authority for misleading environmental messaging. The company had already been fined €40 million (USD $47 million) in France.
   
   
3. In March, superannuation fund Active Super was fined AUS $10.5 million (USD $6.9 million) by the Federal Court in Australia for continuing to invest in fossil fuel and weapons-related industries when it claimed to have pulled out. The company also had to publish a notice about the fine. Sarah Court, deputy chair of the Australian Securities and Exchange Commission (ASIC), said in a press release: “This is a significant penalty that sends a strong message to companies making sustainable investment claims that those claims need to reflect the true position.” She added that the case demonstrated ASIC’s “commitment to taking on misleading marketing and greenwashing claims made by companies promoting financial services.” This was the Commission’s third greenwashing court outcome, and the Court said they would “continue to keep greenwashing in our sights.” The judge in this case, Justice O’Callaghan, said LGSS had benefited from its misleading conduct by misrepresenting the “ethical” nature of a significant part of its investments. This “enhanced its ability to attract investors to the Active Super fund and enhanced its reputation as a provider of investment funds with ESG characteristics.”
   
   
4. In October, a French court found that oil giant TotalEnergies’ claims about its transition to net zero on its website were misleading. The fines were small, but the company had to remove the misleading paragraphs on its website and publish a link to the ruling. The case was the first to consider the veracity of an energy company’s claims to be pursuing a net-zero goal while still exploiting fossil fuels. This case was brought by a group of NGOs that are also pursuing other cases.

Not-for-profit organization The Anti-Greenwash Charter wrote  a list of lessons from such cases:

• Don’t call yourself a leader unless you have strong data as evidence.
• Avoid using broad terms such as “sustainable” and “eco” without clearly explaining what you mean.
• Ensure stated climate targets are realistic according to up-to-date data.
• Make sure that you do what you say you do without exceptions or gaps.

Lawmakers clearly believe sustainability claims have a market value and influence customers and investors. Compliance must expect more cases with higher penalties and should note that fines in one country may lead to more in other jurisdictions.