The Greenwashing Kerfuffle: A Global Tug-Of-War Over Sustainability Truth-Telling

The Greenwashing Kerfuffle: A Global Tug-Of-War Over Sustainability Truth-Telling

June 2025 brought increasing volatility to the already messy world of greenwashing regulation. From assertive moves in Canberra, Québec and Mumbai to dramatic U-turns in Brussels and Washington D.C., the global regulatory landscape for sustainability claims and ESG fund marketing has shifted – and, in some cases, buckled – under political and economic pressures.

On one end of the spectrum, some jurisdictions are forging ahead:

• The Australian Sustainable Finance Institute (ASFI) launched its Sustainable Finance Taxonomy on June 17, a voluntary classification system designed to bring clarity and consistency to green and transition-focused economic activities.
  
  
• Competition Bureau Canada finalized guidance on environmental marketing claims on June 5, arming regulators with clearer standards to enforce new anti-greenwashing rules.
  
  
• The Securities and Exchange Board of India (SEBI) unveiled a robust framework for ESG debt securities, also on June 5. This framework is designed to strengthen definitions; deepen disclosure requirements for issuers of social, sustainability and sustainability-linked bonds (SLBs); and mandate third-party assessments to validate claims.
  
  

Elsewhere, regulatory ambition is being scaled back:

• The European Union’s Green Claims Directive, aimed at curbing vague environmental marketing, was withdrawn on June 20, then quickly revived on June 23. Its fate hinges on whether an amendment covering 30 million micro-enterprises is removed. Meanwhile, tweaks to the EU Taxonomy and SFDR suggest a regulatory softening that may ease legal friction but weaken enforcement.
  
  
• On June 17, the US Securities and Exchange Commission (SEC) quietly shelved a proposed rule that would have required standardized ESG disclosures from investment managers, reflecting political tensions over climate-related financial regulation.
  
  

These conflicting developments are leaving businesses to navigate a splintered and unpredictable terrain – where the same sustainability claim might be applauded in one market and trigger investigation in another. For firms with cross-border operations or capital markets exposure, the lack of regulatory alignment turns compliance into a constantly shifting target.

All of this is unfolding as legal and reputational risks around greenwashing escalate. In June alone, TotalEnergies stood trial in France over the credibility of its climate pledges and Arla was called out by Greenpeace for allegedly misleading consumers through deceptive climate reporting.

These cases underscore an urgent shift: credibility is the new currency of sustainability. Regulators may waffle, but public scrutiny – and legal exposure – is rising. Vague sustainability narratives, inconsistent disclosures or poorly substantiated claims can lead to real consequences. The path forward? Integrated, evidence-backed communication that aligns with the strongest standards globally, not just the weakest locally.

If you are working to communicate your sustainability progress clearly and consistently – while embedding it into core business strategy – read Strategic Focus: The Growing Importance Of A Coherent Sustainability Narrative.