Greenwashing (a compound word modeled on "Whitewashing"), also called green sheen, is a form of advertising or marketing spin that deceptively uses green PR and green marketing to persuade the public that an organization's products, goals, or policies are environmentally friendly. Companies that intentionally adopt greenwashing communication strategies often do so to distance themselves from their environmental lapses or those of their suppliers. Firms engage in greenwashing for two primary reasons: to appear legitimate and to project an image of environmental responsibility to the wider public. Since there is no harmonized and international definition of greenwashing, its determination in a given instance can be a subjective challenge for consumers and regulatory bodies.

Greenwashing occurs when an organization spends significantly more resources on "green" advertising than on environmentally sound practices. Many corporations use greenwashing to improve public opinion of their brands. Complex corporate structures can further obscure the bigger picture.

Corporations attempt to capitalize on consumers' environmental guilt. Critics of the practice suggest that the rise of greenwashing, combined with ineffective regulation and lack of its actual enforcement, contributes to consumer skepticism of all green claims and diminishes the power of the consumer to influence companies toward greener manufacturing processes and business operations. Greenwashing covers up unsustainable corporate agendas and policies. Highly public accusations of greenwashing have contributed to the term's increasing use.

Moreover, the act of greenwashing directly undermines "green trust" in consumers, which also harms the credibility and profitability of the company making the practice. Accurate green marketing can serve as a competitive advantage, but its misuse as greenwashing can lead to the company being perceived as morally irresponsible, damaging its reputation.

Greenwashing has recently increased to meet consumer demand for environmentally-friendly goods and services. New regulations, laws, and guidelines put forward by organizations such as the Committee of Advertising Practice in the UK aim to discourage companies from using greenwashing to deceive consumers. At the same time, activists have been increasingly inclined to accuse companies of greenwashing, with inconsistent standards as to what activities merit such an accusation.

Activities deemed to be characteristic of greenwashing can vary by time and place, product, and the opinions or expectations of the person making the determination.

According to the United Nations, greenwashing can present itself in many ways, such as claiming that the company will achieve future environment milestones while not putting sufficient plans in place to do so, being intentionally vague about operations or using vague claims that cannot be specifically proven (like saying they are "environmentally friendly" or "green"), saying that a product does not contain harmful materials or use harmful practices that they would not use anyways, highlighting one thing the company does well regarding the environment while not doing anything else, and promoting products that meet regulatory minimums as if peer products do not.

Additionally, TerraChoice, an environmental consulting division of UL, described the "seven sins of greenwashing" in 2007 to "help consumers identify products that made misleading environmental claims". The first one is "Hidden Trade-off", which is a claim that a product is "green" based on an unreasonably narrow set of attributes without attention to other critical environmental issues. The second one is "No proof", which is a claim that cannot be substantiated by easily accessible information or a reliable third-party certification. Then "Vagueness" is a poorly defined or broad claim that the consumer will likely misunderstand its meaning. "All-natural", for example, is not necessarily "green". Also there is "Worshipping False Labels", which is a claim that, through words or images, gives the impression of a third-party endorsement where none exists. "Irrelevance", which is a claim that may be truthful but unimportant or unhelpful to consumers seeking environmentally preferable products. Additionally, there is "Lesser of Two Evils", a claim that may be true within the product category, but risks distracting consumers from the more significant environmental impact of the category. Finally, there is "Fibbing", which is a claim that is simply false. Considering these ways of identifying greenwashing, TerraChoice noted that by 2010, approximately 95% of consumer products in the U.S. claiming to be green were discovered to commit at least one of these sins.