Greenwashing is when companies overstate their ESG commitments to mitigating any ESG associated risks. This can be done by adding false data or omitting other data that influences the ESG calculations.
With more regulation arriving and greater investor interest on ESG and its impact to improved stakeholder outcomes, greenwashing has the ability to create fraud on a massive scale.
This is a great time to be in the assurance space to help investors and organisations do business in the right way and improve and validate our approaches to ESG targets.
While more funds appear to be avoiding fossil fuels, investors should not assume that all sustainable funds do. It's also possible that a portfolio earns a Low Carbon designation but has above-average exposure to ESG risk in the portfolio otherwise.
https://www.morningstar.com/articles/1033521/what-is-greenwashing-and-what-you-can-do-about-it
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