Banking and financial services have seen a 70% increase in the number of climate-related greenwashing incidents over the past year.
A RepRisk report, On the rise: navigating the wave of greenwashing and social washing, advised companies to produce self-reflective data to stay compliant with emerging regulations and prevent misleading communication around sustainability.
Greenwashing is a marketing gimmick in which public and private companies make deceiving statements about the environmental impact of its policies, productions, or operations.
In the past year, one in four climate-related ESG incidents were tied to greenwashing, according to the report.
Within financial services, over 50% of climate-specific greenwashing incidents either mentioned fossil fuels or linked a financial institution to an oil and gas company.
The report follows the UK regulator’s work around ESG, adding that the FCA is working with asset managers to make it harder to market investments as green or sustainable without an accompanying ESG strategy.
The report adds that it expects to see the advancement of regulations that will help to separate “misleading communication from true sustainability.”