KPMG outlines the questions multinational fashion brands must ask to navigate inconsistent global greenwashing regulations.
The world might be flat, but amid inconsistent global greenwashing regulations, the road to compliance is bumpy.
Fashion remains a top target for greenwashing—the act of misleading stakeholders about a company’s environmental or social performance. This is further enabled by opaque supply chains and vague marketing language. While ESG and sustainability remain priorities worldwide, countries and jurisdictions differ significantly in policy agendas and enforcement intensity, according to KPMG’s The Challenge of Greenwashing: A 2025 International Regulatory Overview.
An update to its 2024 report, the edition examines 28 jurisdictions (up from 25), highlighting how shifting geopolitical and regulatory dynamics reshape global approaches to greenwashing.
The findings show that a range of environmental claims could violate new regulations. Companies should avoid unsubstantiated claims (overstated or unverified numbers), dubious labels and terminology (‘ecofriendly’ without evidence) and single attribute focus (mentioning a positive while ignoring the negative). Misleading imagery and advertising claims that exaggerate sustainable efforts (highlighting minor eco-friendly initiatives as major achievements) are also problematic.
Greenwashing is always risky for companies—whether legally or reputationally—but multinational brands face heightened exposure in the absence of a uniform legal definition. They must navigate a fragmented ESG regulatory landscape, with some jurisdictions doubling down on enforcement and others moving toward simplification or deregulation.
Inconsistent Regulations
Inconsistent global greenwashing regulations continue to cause headaches and confusion.
The UK is tightening enforcement through the Competition and Markets Authority (CMA), which has power to impose fines for misleading claims. Meanwhile, the Financial Conduct Authority (FCA)’s anti-greenwashing rule is rolling out new sustainability disclosure and labeling requirements for financial products.
Canada has also stepped up enforcement through Bill C-59. Enacted in June 2024, the legislation amended the Competition Act to introduce anti-greenwashing provisions. In 2025, a public consultation on draft enforcement guidelines and the introduction of a private right of action further reinforced the framework, allowing individuals to bring greenwashing claims before the Competition Tribunal.
The EU, often a frontrunner in ESG legislation, hasn’t reduced enforcement expectations, but the recent Omnibus package aims to ease regulatory burden by simplifying ESG rules. This includes changes to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and the withdrawal of the Green Claims Directive.
The U.S., however, has deprioritized ESG under the current administration. Regulators continue to enforce rules such as the Federal Trade Commission’s Guides for the Use of Environmental Claims (aka Green Guides), but guidelines haven’t been updated since 2012.
Without universal regulations or clear definitions, identical marketing language on packaging can trigger enforcement in one jurisdiction while going unnoticed in another. Think high-impact terms such as “sustainable,” “net zero” or “responsibly sourced.”
For instance, a claim that a product helps offset a company’s carbon footprint could be considered greenwashing under Canada’s amended Bill C-59 if it can’t prove that language is “based on adequate and proper substantiation.” In the EU, the claim might be allowed, though subject to NGO or regulator scrutiny. In the US, it would likely pass initial scrutiny, unless challenged by a competitor, state AG or shown to be materially deceptive.
As a result of these widely different standards, KMPG suggests the best bet is to meet the most stringent requirements.
Greenwashing does not need to be intentional to carry consequences, whether legal or reputational. Well-intentioned language “deemed vague or lacking in substance” can still trigger accusations. As a result, many brands have adopted “greenhushing,” the practice of downplaying or concealing sustainability efforts to avoid scrutiny.
The report notes a growing trend of ESG language quietly disappearing from product pages, brands dropping “eco” sub-labels, and reduced public commitments. But silence does not eliminate risk. Stakeholders may interpret reduced disclosure as evasiveness, particularly if prior claims remain visible elsewhere, such as online.
Litigation risk also extends beyond regulators. NGOs, competitors, investors and consumers are increasingly bringing cases—especially in Europe and in high-impact sectors such as fashion, food, energy and finance.
Reducing Risk
To adapt, the report advises brands to treat sustainability marketing claims more like formal disclosures than creative expression. This includes rigorous internal approval processes, legal and ESG review of product copy, and clear documentation supporting every claim.
Certain red flags continue to draw regulatory attention, including disconnects between stated intent and actual performance, such as ambitious future goals without measurable progress.
To mitigate greenwashing risk around the globe, KPMG urges companies to ask themselves five key questions:
First, where can greenwashing arise within corporate activities? At the product, service or operational level—“what you sell”; at the entity level—“what you say”; and at the supplier level—“whom you serve.”
Second, what should you consider when making a green claim? Companies must identify potential risk sources, understand how to substantiate claims and recognize the consequences of noncompliance.
Third, what risks does the company face if accused of greenwashing? These include reputational damage, legal exposure and litigation costs.
Fourth, who is driving the rise in greenwashing accusations? Claims may originate from NGOs and activist groups, business competitors or other stakeholders.
Finally, how are different jurisdictions approaching greenwashing prevention? As greenwashing risk increases globally, companies must stay informed, analyze regional differences and closely track regulatory trends.
