RepRisk has published its 2023 update on corporate greenwashing and it is interesting reading, although care should be taken in considering the results. The study found that greenwashing (which RepRisk calls “Misleading Communication”) continues to grow at an alarming rate. Some of the key findings include:
- 1,850 companies were linked to a risk incident involving Misleading communication, with 1,160 (63%) associated with the issue for the first time.
- One in every four climate-related ESG risk incidents was tied to greenwashing, an increase from one in five in RepRisk’s last report.
- Nearly one in three public companies linked to greenwashing were also associated with social washing (see the next blog).
- The Banking and Financial Services sectors saw a 70% increase in the number of climate related greenwashing risk incidents. Over 50% of these climate-specific greenwashing risk incidents either mentioned fossil fuels or linked a financial institution to an Oil and Gas company.
The findings may need to be taken with a grain of salt, however. A Reuters article about the study clarified that “The European Banking Federation said RepRisk’s report comprised allegations rather than verified claims of greenwashing.” Even so, the point is clear – there is an ever-increasing delta between corporate words and actions on ESG. As regulations grow in multiple countries, the risk of legal risk and regulatory enforcement will soon jump. Yet even at this moment, the business risks are not insignificant as customers turn away suppliers and other stakeholders make decisions/take actions based on ESG disclosures.
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