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With greenwashing penalties expected to rise in frequency and severity in increasing in certain jurisdictions, a German startup focused on plastic reduction, CleanHub, has compiled a ranking of the largest greenwashing fines given out to date.
Volkswagen secured the first place, faced US$34.69 billion in penalties across various countries over several years for using software in its vehicles that misrepresented emissions levels.
Then comes another carmaker, Toyota, which paid US$180 million in fines in 2021 for failing to report defects in its cars’ tailpipe emissions to the Environmental Protection Agency.
Third on the list is DWS, a Deutsche Bank-controlled investment firm, which settled for US$25 million last year after U.S. regulators alleged that the firm had misstated its ESG investing.
Regulators around the world are combating greenwashing with new rules. The European Parliament recently passed a directive banning misleading green advertising. In the UK, new laws effective in May will provide clarity on companies' environmental claims, enforced by the Financial Conduct Authority.
In Canada, the federal government is making amendments to the Competition Act, which currently bars misleading advertising, to ban greenwashing specifically, although some environmental groups say the changes fall short.
Nikki Stones, CleanHub’s vice-president of marketing, said,“Given how substantial these fines are, it’s clear that regulators are trying to send a message to companies. The days of quiet punishments are over when it comes to greenwashing, brands that intentionally mislead consumers over green initiatives will be severely penalized moving forward.”
“We expect to see more greenwashing fines in the coming years. To swerve these penalties, companies need to make sure their environmental claims and initiatives are transparent, truthful and are backed up with evidence,” she said.
