The EU Is Cracking Down on Greenwashing — Which Companies Have the Biggest Gap?

The EU is about to require companies to prove their green claims before making them. For some, that will be straightforward. For others, it will be a reckoning.

TotalEnergies markets itself as a "multi-energy" leader investing in renewables. It does not report Scope 3 emissions -- the category that typically represents over 80% of an oil and gas company's total greenhouse gas output. Ryanair ran an ad calling itself Europe's "greenest airline." The UK Advertising Standards Authority banned it. Shell publicly committed to converting 1 million tonnes of plastic waste into pyrolysis oil annually. It dropped the target in 2023, conceding it was unfeasible.

The EU Green Claims Directive, expected to take full effect in 2026, will change the rules for all of them. We scored eight major European-listed companies on their Planet-Friendly Business dimension using documented regulatory actions, court records, and NGO reports.

For a broader look at the disconnect between ESG ratings and independent evidence, see our analysis of ESG ratings vs independent data.

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Environmental Scores: Eight European Companies Under the Microscope

Scores range from -100 (worst) to +100 (best). Bold indicates notably low scores.

Every company with available data scored negative on Planet-Friendly Business. These are index staples that appear in most diversified European funds and many global ESG portfolios.

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What the EU Green Claims Directive Requires

Under the Green Claims Directive, companies will need to:

1. Substantiate claims before making them -- using recognised scientific evidence and lifecycle assessments
2. Specify whether claims apply to the entire product, part of the product, or the company -- vague corporate-level "going green" language will not meet the standard
3. Disclose offsets separately -- companies cannot count carbon offsets toward product-level environmental claims
4. Submit to independent verification -- claims must be verified by accredited third-party auditors before use

The Corporate Sustainability Reporting Directive (CSRD), already in force for large companies, mandates standardised disclosure of environmental impact under European Sustainability Reporting Standards. Together, these regulations create enforceable requirements where voluntary commitments previously stood.

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Which Companies Are Most Exposed to the New Rules?

TotalEnergies: The Scope 3 Gap

TotalEnergies scores -70 on Planet-Friendly Business, the lowest in this analysis. The regulatory record shows $66.7 million in environment-related penalties across 152 records.

The most significant omission: TotalEnergies does not report Scope 3 emissions. For an oil and gas company, Scope 3 typically represents over 80% of total greenhouse gas output. The company has a net-zero target year beyond 2050, weaker than most peers. While it allocated 35% of capital expenditure to low-carbon energies in 2023, it simultaneously faces criminal complaints for alleged complicity in war crimes in Mozambique.

Regulatory Exposure: Under the Green Claims Directive, TotalEnergies' marketing as a "multi-energy" leader investing in renewables would require substantiation through lifecycle assessments. The absence of Scope 3 reporting means the company cannot currently demonstrate the full emissions impact of its products -- a gap the new rules are designed to close.

View TotalEnergies' full score breakdown

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Shell: 1.2 Billion Tonnes and a Retracted Pledge

Shell scores -50 on Planet-Friendly Business. Total Scope 1, 2, and 3 emissions were approximately 1.2 billion metric tonnes of CO2 equivalent in 2024 -- 1.1 billion from Scope 3 alone.

Shell retracted its 2025 goal to convert 1 million tonnes of plastic waste annually into pyrolysis oil, conceding the target was unfeasible. The company has been officially censured 25 times for breaking safety rules in the UK in six years and prosecuted four times since 2005. It accumulated approximately $29.1 million in ethics-related fines, including penalties for air pollution and price-fixing.

Regulatory Exposure: Shell's retracted waste target is precisely the kind of forward-looking environmental claim the Green Claims Directive targets. Companies will need to demonstrate that targets are achievable at the time they are marketed -- not retract them years later.

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BP: 96 Oil Spills and a Reversed Green Pivot

BP scores -50 on Planet-Friendly Business. Aggregate lifecycle emissions were 644 million tonnes of CO2 equivalent in 2024. The company reported 96 oil spills in the same year.

The legacy of the 2010 Deepwater Horizon disaster is documented in the data: an estimated 600,000 to 800,000 coastal birds killed, 200,000 offshore birds, 167,000 sea turtles. BP's Honest & Fair Business score of -60 reflects $891.99 million in ethics-related fines and settlements over three years.

Regulatory Exposure: BP's strategic reversal from its "green pivot" raises a question the directive was designed to address: when a company markets itself as transitioning away from fossil fuels, then reverses course, what happens to the investor and consumer decisions made on the basis of those claims?

View Shell's full score breakdown | View BP's full score breakdown

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Ryanair: "Europe's Greenest Airline" -- Banned

Ryanair scores -60 on Planet-Friendly Business despite marketing itself as Europe's "greenest airline." The UK Advertising Standards Authority banned the campaign for misleading environmental claims.

In FY24, the airline emitted 18.6 million tonnes of CO2 equivalent. Its SBTi target submission is pending validation. In FY22, 0% of capital expenditure was aligned with the EU Sustainable Taxonomy.

Regulatory Exposure: Ryanair's case is the clearest preview of the Green Claims Directive in action. A UK regulator already found the company's environmental marketing misleading. Under the directive, the same claim would need to be substantiated with third-party verification before publication -- not challenged after the fact.

View Ryanair's full score breakdown

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The Gap Between Green Marketing and Documented Emissions

Volkswagen: Defeat Devices and 412 Million Tonnes

Volkswagen scores -40 on Planet-Friendly Business. The company admitted in 2015 to installing defeat devices in diesel vehicles that systematically concealed real emissions levels, contributing to approximately 1,200 premature deaths in Europe and a $1.45 billion EPA civil penalty.

Total emissions remain at 412 million tonnes CO2e in 2024. While Volkswagen has since invested in EVs and achieved SBTi-validated targets -- exceeding its Scope 1 and 2 reduction goal with a 51% reduction by end of 2024 -- the supply chain still includes gold from the Sudan Gold Refinery, controlled by a paramilitary group accused of genocide.

On Safe & Smart Tech (-70), a data breach exposed personal data of 800,000 EV drivers, including precise location data for 460,000 cars stored unencrypted.

Regulatory Exposure: Volkswagen's Dieselgate case is effectively the precedent the Green Claims Directive aims to prevent from recurring. The difference: under the new rules, environmental claims must be verified before publication, not litigated after fraud is discovered.

View Volkswagen's full score breakdown

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Unilever: Targets Scaled Back, Emissions Up

Unilever scores -40 on Planet-Friendly Business. In December 2023, the UK's CMA launched a greenwashing investigation, citing overstated environmental benefits and unclear recyclability statements.

In April 2024, Unilever scaled back: the virgin plastic reduction target was downgraded from 50% by 2025 to 33% by 2026. The living wage pledge was abandoned. Diversity targets were dropped. Total emissions increased 3.12% to 55.5 million tonnes.

One contrast: Unilever scores +60 on Fair Pay & Worker Respect -- the highest score on any dimension for any company in this analysis.

Regulatory Exposure: Unilever's pattern -- publishing ambitious targets, then quietly downgrading them -- is a core concern of the directive. Under the new rules, the original claims would have required third-party verification at the time they were made.

View Unilever's full score breakdown

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Deutsche Bank: The Largest Greenwashing Penalty in History

Deutsche Bank scores -20 on Planet-Friendly Business. Total emissions were 1.1 million tCO2e in 2024, up 6.11%. The bank sources 97% of electricity from renewables and has SBTi-validated targets.

The governance record: Deutsche Bank's 80%-owned subsidiary DWS was fined for what regulators called the "largest-ever greenwashing penalty." DWS was found guilty of ESG misstatements that misled investors about how environmental factors were integrated into investment decisions. Frankfurt prosecutors imposed an additional 25 million euro fine. Deutsche Bank itself incurred approximately $349 million in ethics-related fines, including a $186 million penalty for insufficient anti-money laundering controls.

The DWS case illustrates how sustainable fund labels can diverge from documented evidence. For more on this pattern, see our analysis of sustainable funds' surprising holdings.

Regulatory Exposure: The DWS case shows that financial products making ESG claims face the same scrutiny as consumer goods. Under CSRD, Deutsche Bank's reporting of how it integrates sustainability factors must now follow standardised reporting standards -- the same standards DWS was found to have misrepresented.

View Deutsche Bank's full score breakdown

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H&M: The "Conscious" Label

H&M lacks sufficient data for a Planet-Friendly Business score. The company's "Conscious Collection" labelling was found to be misleading. On Better Health for All (-50), the supply chain record includes over 250 garment workers who died in the Ali Enterprises fire at a factory certified "safe" weeks earlier.

H&M has made measurable progress in some areas: a 41% reduction in Scope 1 and 2 emissions from a 2019 baseline, a 54% reduction in plastic packaging, and 29.5% recycled materials in 2024.

Regulatory Exposure: H&M's "Conscious Collection" case is a textbook example of product-level environmental claims that the directive requires to be specific and verified. Under the new rules, the label would need to specify exactly what makes each product "conscious" and substantiate it with third-party evidence.

View H&M's full score breakdown

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What the EU Greenwashing Crackdown Means for Your Portfolio

If you hold European equities, these companies are likely represented. They appear in most diversified European funds and many global ESG portfolios. Some carry strong ESG ratings from conventional providers -- Ryanair holds an MSCI 'A' rating and a CDP 'A-'. Deutsche Bank's subsidiary DWS received favourable ratings for the same ESG claims it was subsequently fined for.

The Green Claims Directive and CSRD together create a new standard: environmental claims must be verifiable, specific, and independently audited. Companies that currently score negative on our Planet-Friendly Business dimension may face additional regulatory pressure as these rules take effect.

Mashinii scores are derived from independently documented evidence. Companies cannot improve their Mashinii score by publishing a more favourable sustainability report. The score changes when the underlying conduct changes.

Advisors helping clients navigate EU-listed equities can use Mashinii's data for evidence-based portfolio assessments. See how Mashinii supports advisors.

How We Score

Mashinii scores companies across 11 ethical dimensions using documented evidence from regulators, courts, and independent investigators. Every score is cited. No corporate self-assessments are used.

Learn more about our methodology

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Mashinii provides integrity data for informational purposes. This is not financial advice.