Article: Greenwashing vs. impact branding

Greenwashing vs. impact branding

What does the EU Green Claims Directive mean for your business?

Simply put: if you can't substantiate your sustainability claims with evidence, you'll soon no longer be allowed to make them. The EU Green Claims Directive is changing the rules for every business that calls itself 'sustainable' or 'green'. And the line between greenwashing and authentic impact branding has never been sharper - with real consequences for your brand, your people, and your future.

The green promise nobody believes anymore

We live in an era where almost every company calls itself 'sustainable'. From fast fashion chains flaunting green labels to energy companies planting trees while pumping fossil fuels. Consumers have lost trust - and rightly so.

Research by the European Commission shows that more than half of all environmental claims in the EU are vague or misleading. Forty percent are not backed by any evidence whatsoever. That is not a communication problem. That is a credibility problem.

Greenwashing is not just an ethical mistake. It is a strategic blunder that undermines your brand, your people, and your market position. But there is an alternative: impact branding that starts from who you truly are - not from who you want to appear to be.

What exactly is greenwashing?

Greenwashing is the practice of presenting an organisation as greener, more sustainable, or more socially responsible than it actually is. This can range from subtle to shameless:

• Vague claims such as 'eco-friendly', 'green' or 'natural' without any substantiation
• Selective transparency: highlighting one sustainable initiative while the core activity remains harmful
• Misleading labels and certifications that have not been verified by independent parties
• Future promises without a plan: 'We will be carbon neutral by 2050' with no concrete roadmap or investment

The problem? Consumers, employees, and stakeholders are seeing through it more and more. And now, so is the legislator.

What does the EU Green Claims Directive say exactly?

Europe is drawing a hard line. In recent years, the EU has developed two important directives targeting greenwashing:

1. Directive Empowering Consumers for the Green Transition (2024/825)

This directive, which must be transposed into national law by March 2026, explicitly prohibits:

• Generic environmental claims such as 'eco-friendly' or 'carbon neutral' without evidence
• The display of unreliable voluntary sustainability certifications
• Claims about future environmental performance without a detailed, realistic, and independently verified implementation plan

2. The Green Claims Directive

This proposed directive goes even further, requiring scientific substantiation of environmental claims, harmonised labelling, and prior verification by independent third parties.

The consequences are real. In the Netherlands, fines can reach €900,000 or ten percent of annual turnover. In Italy, the competition authority already imposed a €1 million fine on fast fashion giant Shein in 2025 for misleading claims about their supposedly 'circular' collection — vague assertions about recyclability that simply were not true.

The message is clear: if you cannot prove it, you can no longer claim it.

Concrete examples: when green is not green

Greenwashing takes many forms. Here are a few telling cases:

• KLM was found guilty of greenwashing by the Amsterdam District Court in March 2024. 15 of the 19 claims in the 'Fly Responsibly' campaign were found to be misleading and unlawful, including promises about CO2 compensation and sustainable aviation fuel. The court ruled that KLM painted an overly rosy picture of flying as a sustainable activity.
• Energy companies that position themselves as 'green on the go' or 'sustainable energy providers' while the vast majority of their portfolio consists of fossil fuels. In the Netherlands, this will soon carry a fine of up to €900,000.
• Shell lost a case in 2022 at the Advertising Code Appeals Board over misleading CO2 compensation: the promise that customers could offset their emissions by paying 1 cent extra per litre was found to be legally untenable. The Advertising Code Committee had already ruled against Shell earlier. A textbook example of future promises without proper substantiation.
• Fast fashion brands launching 'organic cotton' collections while 99% of their production continues under the same harmful conditions. The very definition of selective transparency.

What all these examples have in common? The external story does not match what is happening internally. And that is precisely where authentic impact branding makes the difference.

Impact branding: not a story, but a conviction

At BR-ND People, we believe that brands and culture can be a force for good. But that does not start with a campaign or a slogan. It starts with a fundamental question: why do we exist, and for whom do we make a difference?

Authentic impact branding differs from greenwashing on three crucial points:

1. It lives in the core processes, not just in communications

A genuinely purpose-driven brand integrates impact into the heart of its operations. Not as an afterthought, but as a starting point. That means sustainability and social value are reflected in production, procurement, HR policy, governance, and innovation. It is not about crafting a nice story for the outside world — it is about an intrinsic conviction that shapes every decision.

2. It is scientifically grounded and measurable

Where greenwashers make vague promises, impact brands work with concrete goals, measurable indicators, and independent verification. Think of B Corp certification, where your company's performance on governance, employees, community, environment, and customers is assessed by an independent party.

3. It is carried from within

The most powerful difference? In true impact branding, the story is not invented by the marketing department. It is born from the beliefs and experiences of the people who make up the organisation. From the shop floor to the boardroom.

What does this mean for your people?

This is perhaps the most underestimated aspect of the greenwashing debate. Your brand is not just what you communicate externally. It is what your people experience every day.

For existing employees: if the external story does not match the internal reality, cynicism sets in. Employees who notice that 'purpose' is merely a marketing vehicle become disillusioned. This leads to lower engagement, higher turnover, and a culture where nobody believes in the shared goal anymore.

Conversely: when employees experience that their organisation is genuinely contributing to something that matters, engagement, ownership, and pride grow. They become ambassadors — not because they have to, but because they feel it.

For future employees, the impact is even greater. The new generation of workers consciously chooses organisations that share their values. They are digital natives, see through marketing talk in an instant, and openly share their experiences on platforms like Glassdoor and LinkedIn. An organisation that greenwashes loses not only credibility with customers, but also the talent it needs most.

An authentic purpose story is therefore not just a brand strategy. It is a recruitment strategy, a retention strategy, and a culture strategy.

How do you develop authentic impact branding? The power of co-creation

You cannot impose a purpose. You can only discover it together. That is why co-creation is the foundation of every successful impact branding process.

At BR-ND People, we work from an inside-out approach. That means: we do not start with what the market wants to hear, but with what the organisation truly is and can be. The process works as follows:

Step 1: Listen and gather

We begin with in-depth interviews, round-table conversations, and surveys among employees at all levels — from the executive board to the front line. Everyone has a voice, because the story of the organisation is a story by employees for employees.

Step 2: Analyse and interpret

Social scientists and brand strategists analyse the gathered insights. What are the shared convictions? Where is the energy? What is the common thread that connects the organisation? This is where science and creativity meet.

Step 3: Co-create and anchor

Building on these insights, we develop the brand story, purpose, and strategic direction together with a sounding board of employees. This is not a top-down exercise. It is a shared journey in which ownership emerges because people recognise themselves in the outcome.

Step 4: Activate and embed

A great story on paper is worth nothing if it does not live in practice. Activation means: translating the story into behaviour, rituals, leadership development, and concrete actions in the daily running of the business. From onboarding to client contact, from procurement policy to innovation.

From practice: how organisations make the difference

At BR-ND People, we have had the privilege of working with organisations that genuinely want to create impact. A few examples:

• Dierenbescherming (Dutch Society for the Protection of Animals): together we developed a brand story, purpose, and brand strategy for an organisation that puts animal welfare at its core. Not marketing, but an honest translation of a deep conviction into a powerful brand story that resonates both internally and externally.
• Bernhoven: at this hospital, we worked on internal engagement and leadership development through storytelling. Proof that impact branding is not only for 'green' organisations — it is for every organisation that wants to connect its people around a shared purpose.
• Volksbond Streetcornerwork (PerMens): during a merger, we developed a brand story, purpose, and brand strategy with a focus on internal collaboration and engagement. A new brand born from co-creation with the employees themselves.
• Municipality of Tilburg: we guided the development of the 'Story of the Organisation' - a process in which we articulated the identity, values, and mission of the organisation together with all employees through interviews, round-table conversations, and surveys. A textbook example of co-creation in practice.

What all these trajectories have in common? The story was not invented for the organisation. It was discovered with the organisation.

The checklist: is your brand greenwashing or impact branding?

Be honest with yourself. Answer these questions:

• Is our purpose anchored in our core business processes, or only in our communications?
• Can we substantiate every sustainability claim with concrete data and independent verification?
• Do our employees recognise themselves in the story we present to the outside world?
• Have we involved our employees in developing our brand story?
• Do we dare to be transparent about where we still fall short?
• Do our claims comply with the new EU directives?

If you have to answer 'no' to more than two of these questions, it is time for an honest conversation.

Frequently asked questions about the EU Green Claims Directive

What is the EU Green Claims Directive?

The EU Green Claims Directive is a European directive that requires companies to scientifically substantiate environmental claims, use harmonised labelling, and have claims verified in advance by independent third parties. Its goal is to structurally tackle misleading sustainability claims - known as greenwashing.

What are the penalties for greenwashing in the Netherlands?

Under the Directive Empowering Consumers for the Green Transition (2024/825), companies in the Netherlands can face fines of up to €900,000 or ten percent of annual turnover for misleading environmental claims.

What is the difference between greenwashing and impact branding?

Greenwashing is when an organisation presents itself as more sustainable than it actually is - the story doesn't match reality. Authentic impact branding starts from what the organisation truly does and believes: purpose is embedded in core business processes, not just in communications.

From greenwashing to greenbuilding

The world does not need more green promises. It needs organisations that have the courage to be honest about where they stand, and the ambition to do better. Not as a marketing strategy, but as a reason to exist.

The shift from greenwashing to authentic impact branding is not just a legal necessity driven by new EU legislation. It is a strategic opportunity. Organisations that take their purpose seriously attract better people, build stronger relationships, and create lasting value.

The difference between a green coat and a green heart? That difference is not made with a slogan. It is made with your people, your processes, and your daily choices.

Curious how your organisation can make the shift from a nice story to an honest story? Get in touch with BR-ND People and discover how we create impact together — impact that is real.