Home Economy Greenwashing by banks, financial firms soars 70% in 2023: Report

Greenwashing by banks, financial firms soars 70% in 2023: Report

Greenwashing by banks, financial firms soars 70% in 2023: Report

The variety of circumstances of greenwashing by banks and monetary providers firms soared globally by 70% up to now 12 months when in comparison with the earlier 12 months, a report on Tuesday confirmed.

European monetary establishments accounted for many cases and far of the greenwashing concerned claims about fossil fuels.

Environmental, social and governance (ESG) information agency RepRisk recorded 148 circumstances from the banking and monetary providers business globally within the 12 months to the tip of September 2023, up from 86 through the earlier 12 months.

Of the 148 circumstances, 106 had been by European monetary establishments.

Greenwashing entails an organisation making deceptive sustainability associated claims to traders or customers, often to spice up its status and backside line.

“Over 50% of these climate-specific greenwashing risk incidents either mentioned fossil fuels or linked a financial institution to an oil and gas company. These incidents are not happening in isolation and regulators are increasingly aware of the scale of the problem,” RepRisk stated.

European Union watchdogs stated in June that banks, insurers and funding corporations throughout the bloc had made “misleading claims” about their sustainability credentials to traders.

The banking and monetary providers business is second solely to grease and gasoline for the variety of greenwashing incidents, RepRisk stated.

The information agency discovered that greenwashing extra broadly was on the rise.

One in each 4 climate-related ESG danger incidents was linked to greenwashing, a rise from one in 5 final 12 months, it stated, whereas it additionally discovered that one in three firms tied to greenwashing was additionally embroiled in so-called “social washing.”

It outlined social washing as firms presenting themselves positively by “obscuring an underlying social issue” – reminiscent of human rights abuses and company complicity, or impacts on communities – to guard their status and monetary efficiency.

“Misleading communication around environmental and social topics not only impedes progress towards collective goals, but also damages trust with consumers and investors,” RepRisk wrote in its newest report.

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