Greenwashing in Digital Finance: Systainability Claims, Consumer Protection and Liability

By Sandra Danciu (Associate) and Rebecca Marina (Partner) at Filip & Company

For years, sustainability functioned in financial services primarily as a differentiator. Financial institutions promoted “green” products, responsible investment strategies or climate-conscious lending largely as part of branding and market positioning. Today, however, the legal significance of such claims is changing rapidly.

As financial services become increasingly digitised, sustainability statements are no longer viewed merely as marketing language. They are becoming part of the consumer’s economic decision-making process and, consequently, part of the legal architecture surrounding the product itself. Consumers may choose a financial product not only based on pricing or functionality, but also on sustainability-related representations displayed through websites, applications or digital onboarding journeys.

In this environment, sustainability sells financial products. The legal question is whether firms are prepared to substantiate the sustainability narratives they use to market them.

1. The Regulatory Shift: From ESG Messaging to Legal Accountability

   
   

European legislators have increasingly recognised the influence sustainability claims exert over consumer behaviour. If environmental or social representations affect decisions, those representations must be capable of legal verification.

Recent legislative developments reflect this shift in regulatory perspective. The transposition of Directive (EU) 2023/2673 concerning distance marketing of consumer financial services, alongside Directive (EU) 2024/825 aimed at empowering consumers for the green transition and combating unfair commercial practices, recalibrates the relationship between digital finance, consumer protection and ESG communication.

In Romania, these changes have already materialised through amendments to Law No. 363/2007 on unfair commercial practices and Government Emergency Ordinance No. 34/2014 regarding consumer rights in contracts concluded with professionals.

As a result, sustainability claims are no longer treated merely as corporate aspirations. They are gradually becoming legally assessable representations.

2. The New Legal Sensitivity Around Green Claims

One of the most important developments concerns the increasingly restrictive approach towards generic environmental claims. Expressions such as “green”, “sustainable”, “environmentally friendly” or “ESG-focused” may no longer be used freely in the absence of clear, verifiable and demonstrable commitments.

Under the new framework, sustainability representations unsupported by measurable objectives, implementation plans or credible evidence may qualify as misleading commercial practices.

This represents a significant shift for financial institutions, many of which historically relied on broad ESG narratives while the underlying methodologies, data sources or impact assessments remained insufficiently documented. The legal risk therefore extends beyond explicitly false statements. Increasingly, regulators are concerned with claims that are vague, unverifiable or insufficiently substantiated.

In this respect, greenwashing is no longer merely a reputational concern. It is becoming a question of legal evidence.

3. Consumer Protection as an ESG Enforcement Mechanism

   
   

The growing scrutiny surrounding sustainability claims also reflects a broader transformation in the role of consumer protection law. Traditionally associated with transparency obligations and unfair commercial practices, consumer protection regimes are now becoming important enforcement tools against greenwashing.

This is particularly relevant in the context of distance financial contracts, where digital distribution models rely heavily on simplified disclosures, interface design and customer-facing messaging. Regulators are therefore becoming increasingly attentive not only to what firms disclose, but also to how sustainability claims are framed and substantiated throughout the consumer journey.

Financial institutions may increasingly be expected to demonstrate the factual basis underpinning ESG-related representations, including the methodologies used to classify products as sustainable, the criteria applied to environmental assessments and the governance mechanisms supporting such claims.

4. ESG Governance and Evidentiary Risk

The legal implications of sustainability claims now extend well beyond marketing departments. ESG communication increasingly intersects with product governance, compliance, data management and digital customer engagement.

For fintech companies in particular, the challenge may prove significant. Innovation cycles often move faster than governance structures traditionally associated with regulated financial markets, while sustainability messaging is frequently integrated into customer acquisition strategies at an early stage.

At the same time, the broader European regulatory landscape continues to expand expectations regarding ESG transparency and substantiation. Sustainability-related statements increasingly require the same level of governance, verification and legal oversight traditionally associated with financial disclosures themselves.

Ultimately, the firms best positioned to navigate this evolving landscape may not necessarily be those making the boldest sustainability claims, but those capable of evidencing them.