Banks behind 70% jump in greenwashing incidents in 2023

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🗞️ Driving the news: Instances of greenwashing by banks and financial services companies globally surged by 70% in the past 12 months compared to the previous year, reaching 148 cases, according to a report by ESG data firm RepRisk

🔭 The context: European financial institutions accounted for the majority of greenwashing instances, with 106 cases reported
• The rise in claims may be linked to increased scrutiny of banks and their sustainability commitments, says the European Banking Federation, emphasizing the importance of clarity in the concept of transition finance to avoid unsubstantiated greenwashing accusations

🌍 Why it matters for the planet: Greenwashing involves organizations making misleading sustainability-related claims to investors or consumers, potentially damaging trust and hindering progress toward collective environmental goals
• Regulators aim to curb greenwashing to bolster confidence among consumers and investors, directing more funds toward genuine sustainable investments

⏭️ What's next: The lack of a legal definition for greenwashing poses challenges, but regulators are increasingly aware of the issue
• European Union watchdogs have proposed a "common high-level understanding" of greenwashing and the industry is urged to enhance transparency and adopt ESG product labeling

💬 One quote: "Misleading communication around environmental and social topics not only impedes progress towards collective goals but also damages trust with consumers and investors," (RepRisk)

📈 One stat: Over 50% of climate-specific greenwashing incidents mentioned fossil fuels or linked a financial institution to an oil and gas company

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