How to avoid greenwashing in your CSRD report is the focus of a recent paper the European Central Bank (ECB) published an important paper, “Different shades of green: EU corporate disclosure rules and their effectiveness in limiting ‘greenwashing’.”
This in-depth report sheds light on the EU’s ambitious framework to combat greenwashing through corporate sustainability disclosure, particularly via the Corporate Sustainability Reporting Directive (CSRD).
One thing is clear: greenwashing is no longer just a reputational risk — it is a regulatory one. Companies now face stronger scrutiny, mandatory reporting standards, and potential penalties if sustainability claims mislead stakeholders.
So, what outcomes from the report should businesses be aware of? And how can they prepare?
Key Outcomes from the ECB Report on How to Avoid Greenwashing
The report touches upon the following key points for companies with regard to greenwashing:
- CSRD as a Greenwashing Shield —The CSRD is designed to prevent greenwashing by making sustainability disclosures more standardised, comparable, and verifiable.
- Double Materiality Matters — Businesses must report on how their activities impact the environment and how sustainability issues affect their own performance.
- Mandatory Transition Plans — Companies must publish clear, time-bound plans aligned with the European Climate Law to achieve net-zero emissions by 2050.
- Third-Party Assurance — Sustainability reports must be externally verified to boost credibility and prevent exaggerated claims.
- Value Chain Transparency — Companies must report on the sustainability risks across their entire value chain, not just their direct operations.
- Penalties Are Rising — Penalties for misleading disclosures, especially for financial institutions, are becoming more harmonised and severe across the EU.
How to Avoid Greenwashing in Your CSRD Reports
As such, the report provides the following tips on avoiding greenwashing in CSRD reports:
- Ground Your Claims in Data — Back every ESG claim with verifiable data, using standards like the EU Taxonomy and ESRS.
- Align with Science-Based Targets — Set clear 2030 and 2050 goals based on official climate scenarios, not just voluntary pledges.
- Implement a Robust Due Diligence Process — Continuously assess your value chain and document how you prevent and fix sustainability risks.
- Focus on Double Materiality to Avoid Greenwashing — Clearly show how your business impacts — and is impacted by — society and the environment.
- Engage Third-Party Verifiers Early — Involve independent auditors from the start to ensure disclosures meet CSRD expectations.
- Prioritise Clarity and Consistency — Use simple, consistent language — and avoid vague claims without solid milestones.
- Be Ready for Scrutiny — Strengthen internal governance to prepare for deeper reviews by regulators and investors.
Your Action Plan on How to Avoid Greenwashing
The ECB’s report is a strong reminder that sustainability reporting is entering a new era — one where transparency, science, and accountability are non-negotiable. Businesses that embrace these principles will not only comply with CSRD requirements but also build stronger, more trusted brands in an increasingly sustainability-conscious market. Avoiding greenwashing is not just a regulatory necessity. It is an opportunity to lead.
Need expert support with your CSRD or sustainability report? Work with Elizabeth, owner of WordWorx and professional sustainability report writer based in the Netherlands. Make contact via email: info@elizabethjoss.com.