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Hungarian Consumers Also Targeted by Greenwashing

In the United Kingdom, by 2024, four out of ten large enterprises could face severe financial penalties for greenwashing, following the significant tightening of consumer protection laws by the Competition and Markets Authority (CMA) and the European Union.
The phenomenon known as greenwashing, or portraying a company or its products as more environmentally friendly than they are, aims to attract environmentally conscious consumers who may be misled by claims of products being "green" or produced in an eco-friendly way.

Greenwashing in the EU and Hungary

A comprehensive framework of European Union and Hungarian regulations encompasses claims and indications of environmental friendliness. To avoid misleading consumers and facing regulatory sanctions, businesses promoting their products or services with environmental claims must be familiar with industry-specific requirements in addition to consumer protection rules, according to Andrea Magdolna Nagy, a lawyer at Vámosi-Nagy Ernst & Young Law Firm.

Experts, in response to inquiries from the financial daily Világgazdaság, highlighted that the Hungarian Competition Authority (GVH) pays special attention to greenwashing. According to a study published in January, related to a market analysis on environmental claims, out of a representative sample of 7,000 advertisements, slightly over three percent contained sustainability messages, while an additional five percent implicitly suggested sustainability. This is noteworthy given the increasing environmental consciousness among consumers.

In terms of product categories, household items were most frequently advertised as being "green." However, only 23 percent of all product advertisements were supported by certificates, research, or qualifications. Nagy emphasized that not all industries frequently experience greenwashing, but it undeniably occurs, leaving many consumers confused about the true content of green claims.

The Reality Behind Greenwashing

Greenwashing refers to unsubstantiated environmental claims by businesses that use marketing strategies to appear environmentally responsible without genuine action or results in their operations or product attributes.

The Challenge of Identifying Greenwashing

Nagy pointed out the difficulty in accessing credible information, especially with the proliferation of symbols and labels used by manufacturers and sellers to suggest positive environmental impacts of their products. A 2021 Euromonitor survey revealed that less than half of the consumers found green labels such as "fair trade," "GMO-free," "free-range," etc., to be trustworthy, indicating a lack of confidence in green labels in developed markets.

To prevent disappointments, consumers are advised to educate themselves about independent organizations' logos and certificates, such as the EU Ecolabel, which considers the entire lifecycle of products. They should be skeptical of vaguely defined "green" claims, like "environmentally friendly," "eco-sparing," or "sustainable," especially when the specific positive environmental impacts, like water or energy savings, are unclear.

Marketing Strategies and Legal Remedies

In Hungary, both the Hungarian Competition Authority and consumer protection authorities within the county government offices have the authority to inspect companies' green communications. These inspections can reveal whether claims are merely marketing tactics. Nagy Andrea Magdolna shared that complaints can be filed with these authorities if consumers feel misled.

According to a market research by the European Consumer Organisation (BEUC), the environmental impact of a product influences the product preferences of most consumers in European Union member states, with 61 percent of consumers considering environmental information, at least to some extent, when making purchases.
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