Greenwashing creates liability risks based on misleading commercial practices and breach of contract, with fines reaching €900,000 or 10% of annual turnover imposed by the Netherlands Authority for Consumers and Markets (ACM). Additionally, companies face damage claims from consumers and business partners, reputational harm, and contract voidance due to misrepresentation when making false sustainability claims. In this article, we will explain the Liability and Legal Risks of Greenwashing in the Netherlands.
Companies presenting themselves as more environmentally friendly than they actually are operate on legally thin ice. The ACM intensifies supervision of misleading sustainability claims, while courts increasingly rule on greenwashing cases. The District Court of Amsterdam ruled in 2024 that KLM’s advertising statements about environmental benefits of flying were unlawful and misleading.
The legal framework for greenwashing finds its basis in the European Unfair Commercial Practices Directive, implemented in the Dutch Civil Code. This legislation protects consumers against misleading commercial practices and imposes strict requirements on environmental claims. According to Article 6:193a of the Dutch Civil Code, companies must substantiate all sustainability claims with verifiable, independent scientific evidence.
How Are Misleading Sustainability Claims Assessed Under Dutch Law?
Misleading sustainability claims are assessed according to the Unfair Commercial Practices Directive from the Dutch Civil Code. Claims must be truthful, specific, and verifiable under Article 6:193a BW, supported by independent scientific evidence and transparent methodologies.
The legal grounds for greenwashing liability under Dutch law are diverse. First, violation of Article 6:193a BW regarding misleading commercial practices toward consumers may occur. Additionally, tort liability under Article 6:162 BW arises when misleading claims cause damage to third parties. In business relationships, breach of contract becomes relevant when contractual sustainability obligations are violated.
Environmental claims must meet five core conditions according to European guidelines:
- Truthfulness: Base claims on factually demonstrable data
- Specificity: Clearly indicate which aspect the claim concerns
- Verification: Support with sound, independent evidence
- Currency: Based on most recent scientific findings
- Transparency: Unambiguous presentation without misleading context
A company from Amsterdam faced scrutiny after claiming “carbon-neutral production” without adequate offsetting mechanisms. The ACM investigation revealed that only 25% of emissions were actually offset, leading to a €450,000 fine and mandatory website corrections displayed for 12 months.
What Penalties and Fines Do You Risk for Greenwashing Under Dutch Law?
The ACM imposes fines from €900,000 up to 10% of annual turnover per violation for unjustified sustainability claims. Furthermore, courts can issue injunctions, order rectifications, and award damages to affected parties under Articles 6:162 and 6:193a BW.
Practice demonstrates that enforcement is serious. Sports retailer Decathlon committed to a €400,000 donation in 2022 after using the vague “Ecodesign” label without adequate explanation of environmental benefits. H&M donated €500,000 after misleading claims about sustainable material usage. The District Court of Amsterdam ruled that H&M presented consumers with an overly optimistic picture of its sustainability efforts.
Energy suppliers face comparable sanctions. Vattenfall and Greenchoice paid €950,000 and €450,000 respectively after insufficiently substantiated sustainability comparisons on their websites. Greenchoice presented gas as “green energy” through tree-planting compensation, which the ACM deemed misleading. The regulator maintains strict two-year monitoring of compliance with promised adjustments.
Business-to-consumer violations trigger multiple enforcement mechanisms:
- Administrative fines calculated per violation instance
- Mandatory rectification published in national newspapers or websites
- Compliance orders with ongoing monitoring periods
- Market bans for repeat offenders in severe cases
What Are the Procedural Risks in Greenwashing Litigation in the Netherlands?
Greenwashing claims lead to diverse legal proceedings. Consumer organizations and interest groups can initiate collective actions, as ClientEarth and Fossielvrij NL did against KLM in 2022. These organizations demanded cessation of misleading CO2ZERO advertising at the District Court of Amsterdam.
The burden of proof rests primarily with the company. Those making sustainability claims must substantiate them with:
- Independent scientific studies following recognized methodologies
- Verification by external experts without conflicts of interest
- Measurable data regarding environmental impact and CO2 reduction
- Transparent comparison bases for relative claims
Procedural risks include not only direct damage claims but also reputational damage through negative publicity. ACM research showed that only 50% of consumers understand the difference between “CO2 reduction” and “CO2 compensation,” creating further confusion and litigation exposure.
Courts in the Netherlands increasingly grant preliminary injunction requests in greenwashing cases. Therefore, companies face immediate operational disruptions when competitors or consumer organizations successfully challenge sustainability claims. Legal costs for defending greenwashing allegations typically range from €50,000 to €200,000 per case, excluding potential damage awards.
What Liability Arises in Business-to-Business Relationships Under Dutch Law?
In business contracts, liability for misrepresentation under Article 6:228 BW applies when the agreement would not have been concluded without misleading sustainability claims, plus non-conformity when products fail to meet created expectations under Article 7:17 BW.
Between companies, the unfair commercial practices regulation does not directly apply. Nevertheless, business partners can take legal action based on breach of contract or misrepresentation. Contracting parties increasingly include specific sustainability obligations in general terms and conditions.
Legal consequences of business misrepresentation include:
- Contract voidance with retroactive effect under Article 6:230 BW
- Damages for actual loss and lost profits
- Penalty clauses for breach of contractual sustainability guarantees
- Reputational damage affecting suppliers and buyers throughout the supply chain
How Do You Prevent Liability for Greenwashing Under Dutch Law?
The ACM applies five rules of thumb for lawful sustainability communication. First, be specific about sustainability by providing concrete details, such as “35% water savings in production” rather than generic terms like “environmentally friendly.” Second, substantiate claims with current facts that undergo regular verification.
Fair comparisons form the third rule. Compare products transparently and explicitly state what the comparison relates to, for example CO2 savings in packaging relative to the industry standard. Moreover, communicate honestly about the scope of sustainability efforts and limit broader statements to what actually applies to the entire business.
Finally, use certification marks carefully. Choose logos that closely align with specific claims and for which you have obtained official permission. The Advertising Code Committee assesses environmental statements according to the Environmental Advertising Code, whereby all claims must be demonstrably accurate.
The following verification protocol minimizes liability risks:
- Life Cycle Assessment (LCA) according to ISO 14040/14044 standards
- Third-party certification by accredited bodies
- Regular audits of sustainability metrics and claims
- Documentation retention for minimum five years
- Clear disclosure of calculation methodologies and assumptions
Do you have questions about the legal defensibility of your sustainability claims? Legal advisors in Amsterdam analyze your communication materials and advise on appropriate substantiation according to applicable legislation and ACM guidelines.
What New Legislation Is Coming for Sustainability Claims in the Netherlands?
The Green Claims Directive mandates from March 2026 that all companies with more than 10 employees and €2 million annual turnover must obtain independent verification of environmental claims according to recognized scientific methods and measurable, time-bound objectives.
The European Directive on Empowering Consumers for the Green Transition entered into force on March 26, 2024 and must be implemented in Dutch law by March 27, 2026. This directive contains an extensive list of product characteristics about which consumers may not be misled, including future environmental performance.
Companies must substantiate sustainability claims with concrete action plans. Vague future promises like “We strive for climate neutrality” no longer suffice without specific interim targets and measurable results. The directive explicitly prohibits general terms such as “climate neutral” or “green” without adequate substantiation.
The draft directive establishes four minimum criteria for environmental claims:
- Scientific basis: Base claims on recognized research methods and most recent technical knowledge
- Specification: Clearly indicate whether claims concern the entire product or only components
- Comparison standards: Comparative claims face additional transparency requirements
- External verification: Independent audit of substantiation is mandatory
Transitional provisions allow companies until March 2028 to comply fully with verification requirements. However, the prohibition on misleading claims applies immediately upon implementation. Consequently, businesses should commence verification processes now to avoid enforcement actions during the transition period.
What Are the Consequences of Greenwashing for Your Reputation in Dutch Law?
Beyond direct financial sanctions, reputational damage occurs through injunctions and rectifications. Courts regularly order publication of corrections in national newspapers or on company websites, explicitly correcting the original misrepresentation. This negative publicity damages consumer trust and business relationships long-term.
The ACM publishes enforcement decisions publicly on its website, making greenwashing violations findable for years by potential customers and partners. Media attention amplifies this effect, as demonstrated by extensive reporting on KLM’s misleading CO2ZERO campaign.
According to ACM research, greenwashing reduces consumer trust in all sustainability claims, including legitimate ones. This harms not only the violator but also undermines the credibility of genuinely sustainable companies that invest substantially in environmentally friendly practices. Research shows that 73% of Dutch consumers distrust environmental claims after greenwashing scandals.
Reputational consequences extend beyond consumer perception:
- Investment community scrutiny affecting ESG ratings and financing costs
- Supply chain exclusion as major retailers demand verified sustainability credentials
- Employee retention challenges as talent increasingly values authentic corporate responsibility
- Reduced market value with stock prices declining 5-15% following greenwashing revelations
Contact legal specialists in Amsterdam for preventive assessment of your sustainability communication. Proactive verification prevents costly proceedings and protects your business reputation against liability risks.
How Does the Advertising Code Committee Assess Environmental Claims in the Netherlands?
The Dutch Advertising Code Authority operates a self-regulatory system for advertising statements. The Advertising Code Committee reviews commercial communications against the general Dutch Advertising Code and the specific Environmental Advertising Code. Although these standards are not legally binding, courts consider ACC rulings in their balancing of interests under Article 6:162 BW.
The Environmental Advertising Code applies to all advertising with environmental aspects and requires that claims be verifiably correct. The ACC ruled, for example, that Shell’s “Drive CO2-neutral” campaign was misleading because complete neutrality was not demonstrable. Similarly, the committee assessed KLM’s CO2ZERO program as insufficiently substantiated.
ACC sanctions include:
- Recommendation for adjustment of misleading statements
- Publication of the ruling on the ACC website
- Possible referral to ACM for enforcement
- Reputational damage through negative assessment
Two NGOs, ClientEarth and Fossielvrij NL, initiated civil proceedings at the District Court of Amsterdam against KLM in July 2022. The organizations demanded cessation of CO2ZERO advertising, despite earlier adjustments following ACC criticism. This demonstrates that even modified claims can trigger legal proceedings when the core message remains misleading.
Companies should implement pre-publication review procedures whereby legal counsel and sustainability experts jointly assess all environmental claims before publication. This prevents both ACC complaints and subsequent ACM enforcement actions.
What Role Does the ACM Play in Enforcement Against Greenwashing in the Netherlands?
The Netherlands Authority for Consumers and Markets designated “energy & sustainability” as a priority supervision area. In 2021, the regulator investigated environmental claims of 170 companies in the energy, dairy, and clothing sectors. This resulted in in-depth investigations at two energy companies and six clothing retailers.
The ACM protects genuinely sustainable companies against unfair competition from misleaders. Companies that invest substantially in environmentally friendly practices are disadvantaged when competitors with minimal efforts make comparable claims. Therefore, enforcement creates a level playing field for bona fide businesses.
Supervision specifically targets:
- General sustainability terms without concrete content (“Ecodesign”, “Conscious”)
- Label systems whose operation is insufficiently explained
- Future plans without measurable interim milestones
- Comparisons with unclear or misleading comparison bases
The ACM concluded after research that consumers often misinterpret terms like “CO2-neutral.” Only 50% distinguish “emission reduction” from “compensation,” creating substantial misleading risks. The regulator announced additional attention to general and vague terms, potentially resulting in further enforcement actions.
Recent ACM enforcement demonstrates systematic monitoring of sustainability claims across sectors. The regulator employs mystery shopping, website monitoring, and complaint analysis to identify violations. Additionally, the ACM collaborates with European counterparts through the Consumer Protection Cooperation Network, enabling cross-border enforcement against misleading environmental claims.
