Greenwashing growing in frequency, complexity | Dump Trucks Charlotte NC

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Columbus Ohio Dump Truck Company Brief:

• Companies making misleading environmental claims, or greenwashing, made up 25% of climate-linked risk incidents from September 2022 to September 2023, up from 20% the same period the year prior, according to ESG data and research firm RepRisk. The report examined both public and private companies, globally and across sectors.
• RepRisk’s report documented instances of greenwashing rising 35% overall last year, with greenwashing in the financial services and banking sectors increasing 70%. Behind the oil and gas industry, the financial sector has the second-largest share of incidents over the past two years.
• Eighteen percent of companies — and 31% of public companies — who have engaged in greenwashing since 2018 also participated in social washing, or making misleading social claims, in the last year.

Dump Trucks Columbus OH Insight:

RepRisk said it identified rising and more complex greenwashing risks in Europe and North America, as companies go beyond misleading consumers through direct communications and look to receive certificates and make pledges to bolster their appearance of being more sustainable.

The report from RepRisk, which helps clients identify, monitor and manage ESG-related risks, said 25% of the climate-related risks it documented since last September were related to greenwashing.

Climate change and issues of fossil fuel were both common topics of misleading claims. Fifty-four percent of companies in Asia, Europe and North America greenwashed their records on greenhouse gas emissions, global pollution and other climate change-related issues, according to the report. Fossil fuel financing was a major driver of the concentration of greenwashing in the financial and banking sectors. More than half of documented claims from the sectors either mentioned fossil fuels or tied a financial institution to an oil and gas company.

“The expectation of competitive advantage derived from an image of sustainability has opened the door to green and social washing,” RepRisk CEO Philipp Aeby said in a release. “A lack of accountability around a rapidly evolving landscape of corporate sustainability has helped keep this door open for a long time.”

Companies who engage in greenwashing, or what Aeby called “symbolic sustainability,” may have expected kudos but have instead received heightened public criticism for their misleading claims. Aeby said that companies need transparent data to assess their exposure to environmental and social risks.

The report also was RepRisk’s first endeavor to document social washing, which the group defines as contradictions between a business’ image and actual conduct on social issues. The report looked for misleading communications on issues like human rights, occupational health and safety, community impact or child labor.

The columbus oh dump truck company found that many of the social issues were closely tied to environmental issues, documenting 1,544 environmental and social issues. Not only are companies who greenwash more likely to social wash, but they utilize similar playbooks and tactics like selective disclosure, symbolic gestures and corporate political action. Misleading communications on social issues — 1,116 documented — without an environmental component rose 15% last year but at a slower rate than environmental-only risks — up 35%.

With greenwashing becoming more prevalent and complex, the Securities and Exchange Commission recently updated the Investment Company Act’s “Names Rule” to cut down on misleading communications from the investment sector. The SEC’s updates require investment companies who have a specific focus in their name, such as ESG or sustainable funds, to invest 80% of their funds into assets that serve that purpose. 

Funds with more than $1 billion in assets will have 24 months from Nov. 13 — the rule’s effective date — to comply, while funds with less than $1 billion will have 30 months. SEC Chair Gary Gensler said the amendments were necessary after the past two decades of investment industry development led to gaps in the rule.