What Is Greenwashing? (2026 Updated)

More and more customers in New Zealand want to buy from businesses that genuinely care about sustainability. That’s great news if you’ve invested in greener materials, cleaner supply chains, or lower-emissions operations.

But it also means regulators and customers are paying closer attention to environmental claims. If your marketing says “eco-friendly”, “carbon neutral”, or “plastic-free” and you can’t back it up, you could be accused of greenwashing.

This 2026-updated guide breaks down what greenwashing is, why it matters for NZ businesses, where the legal risks sit, and what you can do to market your sustainability efforts confidently (without crossing the line).

What Is Greenwashing (And Why Is Everyone Talking About It)?

Greenwashing is when a business creates the impression that its products, services, or operations are more environmentally friendly than they really are.

It’s not always deliberate. Sometimes it happens because marketing gets ahead of what the business can prove, or because teams use vague “green” language without real evidence.

Greenwashing can show up in lots of ways, including:

• Vague claims (e.g. “eco-friendly”, “green”, “sustainable”) without explaining what that actually means.
• Overstated benefits (e.g. “100% recycled” when only the packaging is partially recycled).
• Hidden trade-offs (e.g. promoting one small green feature while ignoring a major environmental impact elsewhere).
• Unverified certifications (e.g. using badges or labels that aren’t real, or aren’t independently verified).
• Misleading imagery (e.g. “nature” branding that implies an environmental benefit that doesn’t exist).

Why is this such a hot topic? Because environmental claims influence purchasing decisions. If customers buy based on an environmental promise, and that promise is misleading, it can become a consumer law issue (not just a PR issue).

Is Greenwashing Illegal In New Zealand?

There isn’t a single “Greenwashing Act” in New Zealand. However, greenwashing can be illegal under general consumer protection laws if the claims are misleading or deceptive.

The key law to know is the Fair Trading Act 1986. In plain terms, it prohibits businesses from misleading or deceiving consumers (or being likely to mislead or deceive) in trade.

That matters because environmental and sustainability claims are still “claims” about your product or service. If you say it, you need to be able to support it.

Depending on what you sell and how you sell it, greenwashing issues can also overlap with obligations under the Consumer Guarantees Act 1993 (for example, where the product isn’t as described, or doesn’t match the representations made at the time of sale).

In practice, greenwashing risk usually boils down to this:

• If a reasonable customer could take your environmental claim as a factual promise, you should treat it like one.
• If you can’t prove it (with good evidence), you shouldn’t advertise it.

It’s also worth remembering that the legal risk isn’t limited to big corporates. Small and medium businesses can get into trouble too, especially if your marketing is online and widely visible.

Common Greenwashing Examples We See In Marketing

Greenwashing isn’t always obvious. Sometimes it’s a single word on a website. Sometimes it’s the overall “vibe” of a campaign. Below are common examples that can create legal risk if they’re not accurate and properly explained.

1) “Eco-Friendly” Or “Sustainable” With No Specifics

These words are popular because they sound good, but they’re also vague. If you say your product is “sustainable”, ask yourself: sustainable in what way?

For example:

• Sustainably sourced materials?
• Lower emissions in transport?
• Longer product lifespan?
• Ethical labour and sourcing?

If your marketing doesn’t explain the basis of the claim, customers (and regulators) may assume you mean “overall environmentally better”, which could be misleading.

2) “Carbon Neutral” Or “Net Zero” Claims Without Robust Proof

“Carbon neutral” and “net zero” are high-impact statements. If you use them, you need a clear methodology, reliable measurement, and evidence for any offsets used.

Even if you’ve purchased offsets, you should be careful about how you describe what that achieves. Customers may interpret “carbon neutral” as meaning you have no emissions, rather than that you have measured, reduced, and offset emissions.

3) Cherry-Picking One Green Feature

Sometimes a product has a genuine eco feature (e.g. recyclable packaging), but the marketing implies the whole product is environmentally friendly.

If you want to promote one improvement, you usually need to be specific, such as:

• “Packaging is made from 80% recycled cardboard” (if true)
• “Bottles are recyclable where facilities exist” (if that limitation is relevant)

Precision helps customers understand what’s actually improved, and helps protect you from greenwashing allegations.

4) Using Certifications Or Badges Incorrectly

Third-party certifications can be valuable, but only if they’re legitimate and used correctly. Misusing a certification logo, suggesting you’re certified when you’re not, or implying certification covers more than it does can all create risk.

If your business uses logos, label claims, or packaging statements, it’s smart to ensure your branding and marketing approvals are locked down internally (and contractually with designers and agencies). Many businesses manage these relationships using clear Marketing Service Agreement terms so everyone knows who is responsible for what, and what evidence is needed before a claim goes live.

5) Green Claims By Influencers Or Affiliates

If influencers, affiliates, or brand ambassadors promote your product as “non-toxic” or “zero waste”, that can still come back to your business if it’s misleading.

This is where having clear written terms about what can (and can’t) be said becomes important. It’s common to manage this through an Influencer Agreement so environmental claims are pre-approved and evidence-based.

What Laws And Compliance Areas Overlap With Greenwashing?

Greenwashing tends to sit at the intersection of consumer law, advertising, and (often) data and supply chain practices. The tricky part is that a single claim can trigger multiple compliance considerations.

Fair Trading Act 1986 (Misleading Or Deceptive Conduct)

This is the main one. If your green claims are misleading, unsubstantiated, or likely to mislead, you risk breaching the Fair Trading Act.

The risk increases when:

• claims are broad (“environmentally friendly”) rather than specific
• claims are presented as facts, not opinions
• you use absolute language (“100%”, “zero”, “no impact”) without strong proof
• claims rely on complex calculations you can’t explain

Consumer Guarantees Act 1993 (Products Must Match Description)

If you describe a product as having certain environmental characteristics, and it doesn’t, customers may argue it wasn’t as described.

This can lead to refund/repair/replace obligations and disputes that distract from running your business.

Contract And Supply Chain Risk (What Your Suppliers Told You)

A lot of greenwashing issues start with supplier information. For example, a supplier might tell you a component is biodegradable, but you don’t receive documentation. Your marketing team then turns that into “100% biodegradable product”.

If the claim turns out to be wrong, you’re the one facing customer complaints.

That’s why it’s worth tightening up your supplier arrangements and purchase terms so you have clear warranties about the accuracy of environmental attributes, plus remedies if information is wrong. For many businesses, that starts with solid Terms Of Trade and well-drafted supply contracts.

Privacy Law (When Green Claims Are Tied To Data Or Tracking)

Some sustainability messaging involves data, especially if you run:

• carbon footprint calculators on your website
• apps that track usage to estimate emissions savings
• loyalty programmes that reward “green behaviour”

If you collect personal information through these tools, you’ll want to make sure you’re transparent about what you collect and why. A properly tailored Privacy Policy is a key part of that foundation.

How Can My Business Avoid Greenwashing Claims?

If you’re genuinely investing in sustainability, the goal isn’t to stop talking about it. The goal is to talk about it accurately.

Here’s a practical approach we often recommend to reduce greenwashing risk.

1) Make Claims Specific (And Avoid “Fluffy” Language)

Specific claims are easier to verify and less likely to mislead.

Compare:

• Risky: “Our packaging is eco-friendly.”
• Better: “Our packaging is 100% cardboard and contains at least 70% recycled content.”

Specific doesn’t mean you need to disclose confidential data. It just means you should explain what the claim is actually based on.

2) Keep Evidence On File Before You Publish

A good rule of thumb: if you wouldn’t feel comfortable showing evidence of your claim to a regulator, don’t publish it yet.

Your evidence might include:

• supplier certifications and lab reports
• chain-of-custody documentation
• independent audit statements
• internal calculations and assumptions (written down)
• contracts that confirm material composition or sourcing

This is also useful if a customer challenges you. Being able to respond quickly (and calmly) can prevent a complaint escalating.

3) Be Careful With “Absolute” Statements

Words like “zero”, “no”, “completely”, and “100%” can be a trap if there’s any exception.

For example, “plastic-free” might be misleading if the product contains plastic components, adhesives, or plastic lining, even if it’s “mostly” plastic-free.

Where there are conditions or limitations, it’s often better to say so upfront.

4) Don’t Over-Promise On Future Targets

Many businesses set goals like “we’ll be carbon neutral by 2030” or “we’re moving to 100% compostable packaging”. Goals aren’t automatically unlawful - but problems arise when goals are presented as if they’re already achieved, or when there’s no credible plan behind them.

If you want to talk about targets, you should be ready to explain:

• what you’ve done so far
• what steps are next
• what assumptions your plan relies on
• what could change (e.g. supplier availability)

5) Align Your Customer Terms With Your Marketing

Your website and checkout flow can create legal commitments. If your product pages say “fully compostable”, but your customer terms say “materials may vary”, that mismatch can create confusion (and dispute risk).

It’s a good idea to keep your online selling terms tight and consistent. Many ecommerce businesses do this with E-Commerce Terms And Conditions that align with their product descriptions, delivery promises, and refund processes.

6) Build A Simple Internal Approval Process

You don’t need a huge compliance department to market responsibly. Even a small business can implement a lightweight process, such as:

• one person responsible for approving environmental claims
• a shared folder of evidence documents
• a short checklist for marketing (e.g. “Is this claim specific? Can we prove it? Is there a disclaimer needed?”)
• review of packaging and website updates before publishing

This helps you stay consistent across ads, social media, packaging, and sales scripts.

What Legal Documents Help Manage Greenwashing Risk?

Greenwashing risk isn’t just about the words on your website. It’s also about your business systems - who supplies your materials, who writes your marketing, and what happens if something turns out to be wrong.

Legal documents can help you manage that risk from day one.

Supplier And Manufacturing Agreements

If your sustainability claims depend on what suppliers provide, your contracts should do some heavy lifting. You may want clauses covering:

• warranties that sustainability-related information is accurate
• obligations to provide evidence (test reports, certificates)
• audit rights (where appropriate)
• indemnities or remedies if claims are wrong and you suffer loss

These provisions can be tailored into your supply agreements, manufacturing terms, or purchase arrangements depending on how your business operates.

Marketing, Agency, And Contractor Agreements

If you use contractors or agencies to produce ads, packaging, or social content, it’s worth being clear about:

• who is responsible for substantiating claims
• approval rights before content goes live
• what happens if a claim triggers a complaint

This is especially important where external creatives may not understand the legal risk of environmental wording.

Website Legal Documents

If you sell online or collect customer information, you’ll usually need:

• terms for online sales (to reduce disputes about what was promised)
• a privacy policy (to explain how you handle personal info)

Even if greenwashing is your main concern, these documents often form the “supporting structure” for how customers experience your brand and how disputes get managed.

Employment And Training (If Staff Make Claims In Sales Conversations)

Green claims aren’t only made in ads. They also come up in store conversations, customer service emails, and sales calls.

If you have staff, make sure they’re trained not to improvise environmental promises. Your Employment Contract and internal policies can support consistent messaging and reduce the risk of well-meaning but incorrect statements.

Key Takeaways

• Greenwashing is when your marketing creates a misleading impression that your product, service, or business is more environmentally friendly than it really is.
• In New Zealand, greenwashing can be unlawful under the Fair Trading Act 1986 if environmental claims are misleading, deceptive, or can’t be substantiated.
• Common risk areas include vague “eco” wording, overstated benefits, misuse of certifications, and carbon neutral/net zero claims without solid evidence.
• You can reduce risk by making claims specific, keeping proof on file before publishing, avoiding absolute statements unless you can support them, and aligning your marketing with your customer terms.
• Strong legal documents (supplier terms, marketing agreements, and website terms) help manage greenwashing risk by setting clear responsibilities and reducing disputes if something goes wrong.

If you’d like help reviewing sustainability claims, updating your customer terms, or getting your contracts right so you’re protected from day one, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.