Greenwashing: Liability And Litigation Risks In The Netherlands

I Introduction: what is 'greenwashing'?

1. Over the past decade, businesses have generally increased the use of green claims¹ in their marketing materials as society's focus on topics such as sustainability and climate change has increased. Also, various research shows that the number of false, misleading or vague green claims has therefore increased. According to an impact assessment by the European Commission in 2022, 53.3% of all green claims contain vague, misleading or unsubstantiated information and 40% of all green claims made by businesses in the EU have no supporting evidence.²
2. Greenwashing is not yet a fixed or legally defined concept in EU or Dutch legislation but merely described in practice as businesses capitalizing on green claims that cannot be substantiated or do not have a factual or scientific basis. In this context, green claims are considered claims on businesses, products and services that may suggest or create the impression that the business, a product or service has a positive impact on the environment or causes less environmental harm than competing businesses, goods or services.
3. The term greenwashing was introduced in 1986 by researcher Jay Westerveld.³ Westerveld used the term greenwashing to describe the practice of a hotel in Fiji that placed signs declaring 'save towels to save the environment' in hotel rooms. Westerveld coined the term greenwashing to describe a practice of businesses exuding environmental awareness while concealing their real impact on the environment. As a result of the rise of greenwashing and related liability and litigation risks, the concept of greenhushing - businesses hiding their sustainability ambitions to avoid scrutiny from stakeholders and regulators or legal actions - has emerged.
4. In this Quoted, we will focus on answering two questions:
   (i) is the forthcoming EU legislation on greenwashing necessary in the light of the current legal framework under Dutch law?; and
   (ii) do we expect to see an increase in greenwashing cases in the Netherlands?

II Current Dutch legal framework

II.1 Unfair commercial practices

5. In the Netherlands, there is currently no specific legislation to prevent greenwashing claims. To determine whether a claim can be considered greenwashing, the Unfair Commercial Practices Directive (the UCP Directive) is relevant,⁴ which is implemented in Section 6.3.3 of the Dutch Civil Code (DCC) through the Unfair Commercial Practices Act (the UCP Act).⁵ The European Commission has provided guidance on interpretation and application of the UCP Directive.⁶

6. Under Dutch law, an unfair commercial practice constitutes a species of the general tort.⁷ Although the UCP Act does not explicitly regulate greenwashing, it offers a legal framework to address and prevent greenwashing as an unfair commercial practice. The UCP Directive, like the UCP Act, applies to unfair commercial practices of businesses towards consumers, both before, during, and after a commercial transaction related to a product or a service.⁸ The UCP Act specifically addresses misleading and aggressive practices by businesses towards consumers.⁹

7. The UCP Act stipulates two cumulative requirements for a commercial practice to be considered unfair; a qualification under which greenwashing could fall:
(i) the provision of factually incorrect (i.e., false) or misleading information; and

(ii) the information must be of such nature as to cause the average consumer to take a transactional decision that he would not have taken otherwise. This is known as the so-called 'manipulation requirement').¹⁰

8. The UPC Act¹¹ includes several non-exhaustive aspects in respect of which the information provided by the trader may be misleading.¹² The concept of the "average consumer" is assessed on a case-by-case basis. Under the UPC Directive and EU case law, this consumer is reasonably well-informed, observant, and circumspect, considering social, cultural, and linguistic factors. Consumers are expected to engage with the trader's information and seek clarification where necessary.

9. Furthermore, the UCP Act covers two specific misleading practices: (i) marketing (including comparative advertising) that causes confusion with a competitor's product; and (ii) failure to comply with obligations of a code of conduct the trader has committed to, such as by referring to it on their website.¹³ On top of that, the UCP Act contains a so-called 'black list' of explicitly prohibited commercial practices that are considered misleading under all circumstances.¹⁴

II.2 Remedies in case of misleading commercial practices

10. If a consumer alleges that a company is engaging in a misleading commercial practice, the consumer can claim
(i) compensation for damages;¹⁵
(ii) annulment of the legal act (vernietiging);¹⁶ or
(iii) rescission of the contract (ontbinding).¹⁷

11. In addition to the UCP Act, greenwashing could - at least in theory - also be assessed under the legal concept of non-conformity. This concept, rooted in consumer law, refers to situations where a delivered product or service does not meet the agreed or expected standards. However, the standard remedies under Dutch law for non-conformity - such as repair or replacement - are generally less relevant in the context of greenwashing and will therefore not be further discussed.¹⁸

II.2.1 Compensation for damages

12. A consumer can rely directly on the UCP Act to claim compensation for damage suffered because of a purchase made because of misleading information. In order to bring such a claim, at least three conditions must be met:
(i) attribution of the green claim that can be qualified as greenwashing (see paragraph 7 above);
(ii) a causal link between the greenwashing claim and the conclusion of the contract; and
(iii) the consumer must have suffered damage as a result of entering into the agreement.¹⁹

13. The business bears the burden of proving the accuracy and completeness of the information it provides.²⁰ Proving causation is more challenging for consumers, as the reversal of the burden of proof does not relate to causation or the existence of harm.²¹ The consumer must first prove that the 'average consumer' would not have entered into the contract in the absence of the misleading communication and then prove that his contract was concluded as a result of the unfair commercial practice.²² In addition, the consumer must prove and substantiate both the existence and the amount of damages.

14. In addition to invoking the UCP Act, the consumer can rely on general Dutch tort law for failure to comply with a legal obligation.23 In this case, besides the three aforementioned requirements, the principle of relativity applies.24 This requirement implies that the standard (derived from - for example - the UCP Act) that was violated must have had the purpose of protecting against the damages that occurred (as a result of greenwashing).

15. In relation to consumers, it is questionable whether Dutch tort law serves as a full alternative to the UCP Act in a business-to-consumer context, as the UCP Act already sets clear standards. This may be different for business-to-business relations because the legal standards under the UCP Act are adopted for business-to-consumer relations and are therefore only partially applicable to business-to-business relationships, which are less well-defined.²⁵

II.2.2 Annulment of the contract

16. To successfully annul the contract,²⁶ the consumer must prove the causality between the incorrect claim and the conclusion of the contract, as the reversal of the burden of proof does not apply for this remedy. This requirement could be a stumbling block for consumers.²⁷ The fact that the average consumer makes or could make a decision to enter into a transaction that the consumer would not have made otherwise due to the way the product or service was marketed does not automatically mean that the individual consumer was influenced by the practice when they decided to enter into an agreement. It is the responsibility of the consumer to state and, if necessary, prove the latter.²⁸ However, it appears that in practice, this is not a significant obstacle. It is not uncommon for Dutch courts to assume that consumers may have been misled into agreeing to something they did not fully understand.²⁹

II.2.3 Rescission of the contract

17. Consumers also have the right to rescind a contract as a whole or in part if a product does not meet expectations, if the product is non-compliant.30 Partial termination may be a solution, for example via a price reduction. In the case of full dissolution, the deviation of the product must be significant enough to justify it. In the context of green claims, it is essential to assess the correlation between the absence of a sustainable aspect and the remaining components of the product. In general, Dutch courts seem to be more inclined to adjust the price than to completely rescind the contract.³¹

III Empirical analysis of decisions of the RCC

18. Over the past few years, there has been a relatively large number of greenwashing cases (28 cases since 2020)32 before the Dutch Advertising code commission (Dutch acronym: RCC, Reclame Code Commissie) and by its appellate body, the Board of Appeals (Dutch acronym: CvB, College van Beroep). In these cases, both individual consumers and (competing) businesses have filed complaints against businesses using claims that could allegedly be characterised as greenwashing. As we will discuss inchapter IV below, in the cases of Perfetti Van Melle/Benbits and Fossielvrij/KLM, civil litigation followed after the RCC ruled that Benbits' and KLM's advertisements constituted greenwashing because the advertisements contained green claims that were false and/or misleading.

19. Our analysis of RCC and CvB decisions³³ identifies two key criteria in the assessment of environmental claims: the presentation of an overly positive image and the material likelihood of misleading the average consumer. The line between legitimate green claims and greenwashing is crossed when claims are incomplete, inaccurate, or overly optimistic about the environmental benefits. The RCC and CvB often use terms such as 'incomplete', 'inaccurate', 'suggestive' and 'misleading' to describe such claims. Contextual factors, including the intended audience and the broader societal discourse, are also considered.

Greenwashing occurs, for example, when claims are not only factually inaccurate, but also have a significant potential to mislead consumers.

III.1 The RCC

20. The RCC is not a regulatory authority, but a body for handling complaints and disputes in respect of advertisements. The Dutch Advertising Foundation (Dutch acronym: SRC, Stichting Reclame Code) is the organisation under which the RCC operates. The RCC is funded by advertisers in the Dutch market and deals with the self-regulation system of advertising. These rules, formulated by the advertising industry itself (a form of soft law), are laid down in the Dutch Advertising Code (the Code).³⁴ Both businesses and consumers may file a complaint with the RCC if they believe an advertisement breaches the Code (e.g., due to greenwashing). If a violation is found, the RCC may recommend that the advertiser stops the practice. While the RCC cannot impose formal sanctions or award damages, it monitors compliance. RCC decisions can be appealed, which are handled by the CvB. As we will discuss in this chapter III, the RCC has developed a clear standard for assessing greenwashing claims. The 28 RCC decisions so far have not yet sparked a broader wave of case law on greenwashing in the Netherlands, as we will discuss in chapter IV below.

III.2 Green claims provisions in (self) regulation

21. The RCC assesses green claims based on articles 7 and 8 of the Code. These provisions (self-) regulate unfair and misleading advertising.

Article 7 of the Code reads as follows:

Article 8 of the Code reads (among others):

22. Since 1 February 2023, the Code for Sustainability Advertising (Dutch acronym: CDR, Code Duurzaamheidsreclame) has been in effect in the Netherlands. Article 3 CDR specifically deals with misleading green claims and is therefore - in conjunction with Articles 7 and 8 NRC - currently used by the RCC and the CvB as an assessment criterion in the context of misleading green claims.

Article 3 of the CDR reads:

III.3 Analysis of RCC's greenwashing decisions

23. An empirical examination of the RCC and CvB rulings shows that two standards have become central in assessing green claims: (i) 'painting an overly rosy picture' and (ii) materially distorting the economic behaviour of the average consumer. Painting an overly rosy picture has already been adopted by the civil court in the Fossielvrij/KLM-ruling (see in paragraph IV.1 below).

III.3.1 Painting an overly rosy picture

24. From the RCC decisions, it appears that incompleteness of information was qualified as painting an overly rosy picture in the first RCC decisions regarding greenwashing. In later RCC decisions, this standard was also based on inaccuracy, suggestive wording and raising expectations that were not (yet) fulfilled. At the same time, the application of this standard is ambiguous. The RCC and the CvB use different terms - such as 'inaccurate', 'distorted', 'one-sided' or 'suggestive' - often without a sharp distinction. The degree of expressiveness also varies; sometimes providing an overly optimistic view is directly cited as a reason for misguidance, sometimes it is only implicitly assumed. Nevertheless, some touchstones can be identified in the rulings discussed. In exceptional cases, the CvB has permitted one-sided or incomplete expressions, provided they are clearly understood by the average consumer to present a positive perspective.

In this regard, context and social debate can play a mitigating role. It is important to note that consumer knowledge may not always have a significant impact.³⁵

25. An example of a RCC decision in which the RCC found that an advertiser had painted too rosy a picture were Shell's 2024 advertisements. The complainant argued that Shell's advertisements, which appeared at bus stops, in newspapers, on websites, on TV and in cinemas, gave a misleading impression of Shell's actual contribution to the energy transition. This was mostly because the adverts only highlighted specific aspects, failing to mention the ratio between fossil and low-carbon energy products in Shell's overall business model. The case revolved around the following statements by Shell:³⁶

26. The CvB blamed Shell for not expressing that fossil activities were still part of its core business.37 The fact that the CvB assumed that the average consumer knows Shell as a supplier of fossil fuels did not alter this. Since Shell did not explicitly state that fossil activities were part of its core business, only the business logo and the message that Shell is committed to sustainable energy remained. This gave the average consumer too rosy a picture of the phase of the energy transition Shell was in.³⁸

27. Furthermore, the context may necessitate applying the standard to a specific target group, rather than the average Dutch consumer. The RCC did this with a decision on 21 December 2020 in which the RCC decided that too a rosy picture of how pigs are kept alive was portrayed to children. This decision was upheld by the CvB.³⁹

28. The RCC and the CvB assign weight to the relativity of expressions. For example, the expressions that a programme "[contributes] to a more sustainable future of aviation" and "SAF has the potential to reduce CO2 emissions by up to 85 per cent compared to fossil fuel" did not paint too rosy a picture, according to a CvB decision in 2020.⁴⁰ In doing so, the RCC (and, affirmatively, the CvB) emphasised that the expression was clearly forward-looking and spoke only of potential for reduction; the expressions were therefore not absolute. There was no suggestion embedded about the extent to which SAF was already being used and/or CO2 emissions reduced. By only highlighting the potential of SAF in the future, the expressions did not provide a sufficiently accurate representation of the relationship between the use of SAF and regular paraffin, nor of SAF as a solution to the climate problem.⁴¹

III.3.2 Materially distorting the economic behaviour of the average consumer

29. The second standard, as set out in Article 5 of the UPC Directive and Article 7 of the Code, is that the economic behaviour of the average consumer must not be materially distorted. This is a standard of assessment for unfairness. In that context, misguidance is a form of materially distorting economic behaviour. In practice, however, a trend can be discerned in which the RCC and the CvB have started to apply this standard specifically in the assessment framework of misguidance, especially as regards to green claims. In addition, this standard is linked to providing an overly optimistic view. It could be possible that civil courts will also apply this standard or similar ones in future civil cases.

30. An example of application of the standard in the context of green claims can be found in a 2022 RCC decision.⁴² When Albert Heijn advertised with the statement "Consumers again find Albert Heijn to be the most sustainable supermarket", the individual complainant in the proceedings argued that the supermarket chain was not allowed to market itself as such. Although Albert Heijn came out on top in a Sustainable Brand Index 2022 survey, there was no statistically significant difference between number one and number two, as Albert Heijn also acknowledged. The RCC considered that when an advertiser uses a title as 'winner' in its advertising it has a responsibility, in the context of professional diligence, to make sure that such an outcome and the underlying research are correct. According to the RCC, this applies even more to topics such as sustainability.⁴³ The RCC found that Albert Heijn failed to meet its duty of professional diligence by not contacting the research bureau to clarify the study's findings before filing its complaint. As a result, Albert Heijn acted irresponsibly. Additionally, the green claim in question was considered likely to mislead the average consumer, thereby violating Article 7 of the Code.

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Footnotes

1. In this Quoted, the term green claims also includes sustainability and environmental claims.

2. Commission Staff Working Document Impact Assessment Report Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information.

3. J. Pearson, Are We Doing the Right Thing?, J. Corp. Citizsh. 2010, page 37.

4. Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/ EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive).

5. Articles 6:193a-6:193j DCC. See for example K.I.M. van Leusden, 'Van green claims naar greenwashing', MvO 2024/8-9, page 205.

6. Commission Notice – Guidance on the interpretation and application of Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market (2021/C 526/01).

7. Article 6:162 DCC.

8. Article 3 of the Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive).

9. Articles 6:193c-193g DCC and Articles 6:193h and 6:193i DCC.

10. Articles 6:193b para. 2 DCC.

11. Article 6:193c DCC.

12. Articles 6:193c para. 1 DCC.

13. Article 6:193c DCC.

14. Articles 6:193g and 6:193i DCC.

15. Article 6:193 DCC.

16. Article 6:193j para. 3 DCC.

17. Article 7:17 DCC.

18. Article 7:21 DCC.

19. J.E.S. Hamster, 'Vijftig tinten groen – de vele civiele kleuren van greenwashing', NTBR 2022/49, page 13.

20. Article 6:193j para. 1 DCC.

21. E.E.C. van Nievelt and F.M. VerburgIs, 'Is de consument het kind van de rekening in geval van greenwashing?', TvOB 2024/6, page 156.

22. J.E.S. Hamster, 'Vijftig tinten groen – de vele civiele kleuren van greenwashing', NTBR 2022/49, page 8.

23. Article 6:162 DCC.

24. Article 6:163 DCC

25. Articles 6:194-6 :196 DCC.

26. Article 6:193j para. 3 DCC.

27. J.E.S. Hamster, 'Vijftig tinten groen – de vele civiele kleuren van greenwashing', NTBR 2022/49, page 8.

28. C.M.D.S. Pavillon, L.B.A. Tigelaar, 'Vernietiging van de overeenkomst bij een oneerlijke handelspraktijk; een hanteerbare sanctie?', Contracteren 2018, no. 3, para. 3.2.

29. J.E.S. Hamster, 'Vijftig tinten groen – de vele civiele kleuren van greenwashing', NTBR 2022/49, page 8.

30. Articles 7:17 DCC in conjunction with 7:22 para. 1 DCC.

31. J.E.S. Hamster, 'Vijftig tinten groen – de vele civiele kleuren van greenwashing', NTBR 2022/49, page 8-9.

32. This Quoted was finalized on 20 May 2025. The authors did not consider any relevant developments after that date.

33. The authors have conducted an empirical analysis into RCC and CvB decisions that can be found on the website of the SRC and have selected the decisions with the search term "greenwashing".

34. https://www.reclamecode.nl/engels/dutch-advertising-code/general/.

35. CvB 13 November 2024, 2024/00022 – CVB.

36. CvB 13 November 2024, 2024/0002in 2 – CVB.

37. CvB 13 November 2024, 2024/00022 – CVB.

38. CvB 13 November 2024, 2024/00022 - CVB, para. 7.16.

39. CvB 16 March 2021, 2020/00480 - CVB.

40. CvB 13 October 2020, 2020/00136/I - CVB.

41. CvB 13 October 2020, 2020/00136/I - CVB.

42. RCC 2 November 2022, 2022/00214.

43. RCC 2 November 2022, 2022/00214, para. 1-6.

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