Extract from Jim Gill’s article “The Downside of ESG: The Dangers of Greenwashing”
In recent years, there has been an increasing trend for companies to claim environmental sustainability, making public commitments to lower carbon emissions and other eco-friendly measures. However, this rise in environmental claims has also led to the concern of greenwashing, where companies make false or exaggerated statements about their environmental practices. This article delves into the issue of greenwashing, its risks, and the lack of accountability and regulation for ESG commitments.
What Is Greenwashing?
While proactive organizations want to demonstrate that they’re participating in meaningful ESG programs, they must be careful not to overstate their commitments or their ability to follow through on those commitments. To do otherwise could open them up to public scrutiny and even litigation, including claims of greenwashing.
Greenwashing occurs when an organization makes false or inflated claims about the environmental soundness of its practices or products. As more organizations make public—and often impressive-sounding—environmental sustainability claims, greenwashing is becoming a bigger concern.
