How Organizations Are Using AI To Detect Greenwashing

By: Abir Hbibi | March 31, 2022

Over the past decade, many organizations have engaged in improving their carbon footprints, from resorting to recyclable and biodegradable packaging (away from single-use plastic) to planting trees and reducing their greenhouse gas emissions. However, some businesses and companies looking to boost their eco-friendly image without committing to serious changes and addressing environmental issues have been associated with false marketing. We call this “Greenwashing.”

What is greenwashing?

Greenpeace and the Environmental Protection Agency define greenwashing as making false and misleading claims about a product's environmental benefits or practices, services, technology, or company practice. Greenwashing typically involves companies spending more money on advertising and marketing than on implementing sustainable business practices that minimize environmental impact. These false claims can deceive consumers into believing that a product or company is more environmentally friendly than it is, leading to increased sales and profits. As a result, false advertising, misleading initiatives, and groundless claims have increased green investors' exposure to risks emerging from potential lawsuits from activist groups, image deterioration, and some heavy loss in assets invested.

Why is spotting greenwashing important?

Greenwashing is a growing concern for investors as they look to make sustainable and responsible investments. Therefore, spotting greenwashing practices is important for these firms. Here’s why.

The deceptive practices used by greenwashers can have significant implications for the integrity of investments made in what investors believe to be sustainably operated companies or sustainable funds. In other words, greenwashing makes it difficult for investors to distinguish between companies that are genuinely committed to sustainability and those that are merely making false claims about their environmental practices. As a result, investors may unknowingly invest in companies that are not as sustainable as they claim to be, which can harm their financial returns and the environment. Therefore, it’s essential for investors to be aware of greenwashing tactics and to carefully research companies before investing in them to ensure that their investments align with their values and contribute to a more sustainable future.

What are the challenges to detecting greenwashing?

It’s challenging to produce an accurate assessment of environmental, social, and governance (ESG) factors, which gives companies the opportunity to cover or hide ineffective and fake green initiatives.
According to Regtank, some of the main challenges to detecting greenwashing practices are the following:

    • Lack of reporting standards: some investors believe that we haven’t universally agreed upon a set of standards to determine whether a product is ESG compliant.
    • Lack of transparency: greenwashing companies don’t disclose the specificities of their “green campaigns,” which makes it difficult for investors and consumers to fact-check and evaluate their marketing claims.
    • Limited consumer awareness: false marketing strategies could be based on a combination of the consumer’s eco-consciousness and brand loyalty. As a result, consumers become less aware of the misleading strategies greenwashing companies use to sell their products.

Ultimately, these factors may contribute to the inaccuracy and limitations of ESG data and scores, which makes it easier for greenwashers to get away with their false marketing campaigns. Consequently, detecting greenwashing requires scrutiny of environmental claims made by companies and an understanding of the complex supply chains and manufacturing processes involved in producing products and services.

How does SESAMm detect greenwashing?

As greenwashing practices increase, activist investors, experts, journalists, and even the general public are spreading awareness of the issue by making use of social media, news outlets, forums, and blogs, among other means.
Recently, artificial intelligence (AI), particularly natural language processing (NLP), has proven to be effective in the early detection of greenwashing by analyzing vast amounts of qualitative data publicly available on the web. At SESAMm, for example, we apply our NLP capabilities to identify companies likely to engage in greenwashing practices by analyzing text in billions of web-based articles. Our data lake contains over 20 billion web–sourced articles varying from news and blogs to social media and forum discussions on five million public and private companies. We run these articles through our AI platform tool, TextReveal®, and systematically craft reliable, timely, and comprehensive insights to detect greenwashing, generate ESG alerts, and identify related risks.

Examples of greenwashing detected by TextReveal

We analyzed greenwashing data available on our data lake to extract two different cases showcasing two different degrees of greenwashing. First, let’s take a look at the volume of web mentions of greenwashing over time. We can see in Figure 1 that the concept of greenwashing has been witnessing an increase over the past few years, notably in late 2022 and early 2023. This spike might imply that web surfers are now more aware of fake green marketing campaigns, and more companies are being exposed for their greenwashing practices.

Greenwashing mentions over time chartFigure 1: Greenwashing mentions over time.

As an example, we studied web data on the consumer staples industry greenwashing mentions. We found that its volume of mentions in relation to greenwashing has been fluctuating starting from January 2022, with two major spikes in the second and fourth quarters of the same year. These two increases mainly track back to controversies sparked by two Consumer Staples giants, Coca–Cola and Nestlé.

consumer staples industry greenwashing mentions over time chartFigure 2: Consumer Staples Industry: greenwashing mentions over time.

We looked into how and why Coca–Cola and Nestlé are at the center of the greenwashing claims detected by TextReveal.


Coca–Cola is one of the largest producers of soft drinks. It’s also evident that the company significantly contributes to plastic waste. According to The Street, Coca–Cola is one of the world’s largest plastic waste producers, with around three million tons of plastic per year. When faced with public pressure, the company decided to go green and show their customers, partners, and the general public that they, too, care about the environment and the future of upcoming generations. However, in the pursuit of painting its image as “green,” Coca–Cola received backlash and has been called out many times for its false marketing and greenwashing practices. In 2021, the Earth Island Institute sued the company for its deceptive sustainable marketing. Last November, Coca–Cola’s greenwashing mentions witnessed an increase after deciding to sponsor the United Nations Climate Change Conference “COP27”, which riled up activists who called on the UN to remove it as a sponsor seeing its impact on the planet and its contribution to climate change. 

According to our environmental, social, and governance (ESG) reports and as shown in Figure 3, Coca–Cola’s greenwashing web mentions are high despite having steady mentions of environmental initiatives. These accusations of greenwashing appear to be correlated with spikes in negative sentiment related to environmental risks and controversies.

coca-cola greenwashing mentions over time chartFigure 3: Greenwashing, environmental risks, and environmental initiatives correlation for Coca–Cola.


Nestlé, another food giant, has also been associated with greenwashing controversies. However, the volume of mentions wasn’t as high as Coca–Cola. The company has shown low environmental risks and greenwashing web mentions compared to the high volume of mentions related to sustainable initiatives (Figure 4). In 2022, Nestlé, among others, was accused of greenwashing practices, which hasn’t affected the company’s image.

nestlé greenwashing mentions over time chartFigure 4: Greenwashing, environmental risks, and environmental initiatives correlation for Nestlé.

Greenwashing and ESG Investing

In sum, certain companies advertise their sustainability and green initiatives, while in reality, they are making false claims and practicing greenwashing, as evidenced by our analysis using SESAMm's NLP and ESG reports. We use AI through TextReveal to generate alternative data for use cases, such as ESG and SDG, sentiment, private equity due diligence, corporate studies, and more. Our technologies can reliably ensure the credibility of ecological initiatives and serve global investment firms, corporations, and investors, such as private equity firms, hedge funds, and other asset management firms, to enhance their investment strategies. 

Reach out to SESAMm

TextReveal’s web data analysis of over five million public and private companies is essential for keeping tabs on ESG investment risks. To learn more about how you can analyze web data or to request a demo, reach out to one of our representatives.