We investigate how individuals interpret corporate sustainability disclosures in a pre-registered survey experiment. Participants can distinguish greener from browner firms better than applying uninformed guessing, but their assessments are systematically compressed toward the middle of the scale. This compression is asymmetric: respondents overestimate the greenness of browner firms but they underestimate the greenness of greener firms even more strongly. The pattern is the same among finance professionals or sustainability experts, suggesting that expertise alone does not resolve the interpretation problem. We then examine how disclosure design can mitigate these errors. Providing benchmark information, presenting emissions in relative terms, and translating emissions into familiar metrics improve participants’ ability to distinguish firm greenness.