Whisper sweet nothings in my ear, but let’s keep it clean.
While I love hearing about your passion for the environment and your particularly impressive investments in sustainable projects, I don’t want to discover that behind the green facade, you are still heavily invested in your dirty and environmentally and socially damaging practices.
Sadly, there continues to be an alarming rise in false or misleading claims of sustainability, commonly known as greenwashing. The recent European Banking Authority progress report on greenwashing confirms this troubling upward trend. Greenwashing not only undermines market integrity and the credibility of sustainable investing but also erodes consumer trust and harms the environment and society. If that’s not enough to make you sit up and listen, this deceptive practice also imposes new risks and potentially large liabilities for financial firms.
To address these challenges and reduce liability, Leaman Crellin has developed the Greenwashing Awareness Training course for Financial Professionals. Our training helps firms identify and prevent greenwashing risks through face-to-face sessions (subscribe to our newsletter for upcoming dates) or by purchasing comprehensive training materials from our shop, including a presenter script and scenario tests.
A deceptive and confusing world
The deceptive world of greenwashing can be very confusing. Just understanding what constitutes greenwashing can get complicated and arming people with knowledge is a fundamental step in prevention. For instance, it is commonly thought that greenwashing includes two major classifications: claim and executional greenwashing. Both can occur at the product or firm level, intentionally or accidentally. To give an example, claim greenwashing involves false environmental and social claims, while executional greenwashing is when a company promotes genuine environmental initiatives but fails to effectively implement them. These practices then encompass different taxonomies of greenwashing, from selective disclosure and deceptive manipulation which are more commonly understood, to other less familiar practices, decoupling and attention deflection.
Navigating a complex landscape of regulations, labels, disclosures, and acronyms is confusing and can be contradictory. Under one regulatory regime a product could be labelled as sustainable whereas under a different regime it is not. Terms like blue washing, carbon washing, sustainable washing, and eco-bling further complicate matters.
Mitigating deceptive practices
To combat greenwashing, stakeholders need to be equipped to identify and understand the wide range of deceptive practices. The pressure to combat greenwashing extends beyond consumer preferences, as companies are expected to deliver on both value and environmental claims, which can incentivise some to engage in greenwashing.
Additionally, concerns over accusations, bottom-line impact, political scrutiny, and data overload can hinder open discussions about sustainability efforts and lead to another deceptive practice, known as green hushing, where a company downplays it’s environmental or social impact.
Despite the financial incentives for companies to appear sustainable and socially conscious, governments, industry watchdogs, regulatory bodies, and sustainably conscious consumers play an incredibly crucial role in monitoring and enforcing truthful marketing and environmental claims. Implementing stringent regulations, standards, and certifications create anti-greenwashing frameworks and hold companies and their directors accountable for their environmental commitments.
Fostering consumer awareness, supporting transparent businesses, and advocating for stricter regulations are crucial to address this issue. Financial firms must go beyond traditional greenwashing prevention measures and look beyond their own walls.
Conclusion
Preventing greenwashing and deceptive practices requires a collaborative effort from financial firms, policy makers, regulators, investors, consumers and beyond. It is crucial to establish robust anti-greenwashing frameworks, harmonise standards, increase transparency, and, most importantly, prioritise education. These are the solid foundations for building trust and credibility in the fight against the environmental and social crisis as well as greenwashing.
In a world where greenwashing whispers sweet nothings in our ear, let's rise above the deception and create a future where sustainability speaks volumes. Join Leaman Crellin’s Greenwashing Awareness Training course for Financial Professionals and together, let's silence the misleading claims and pave the way for a cleaner and greener tomorrow. Subscribe to our newsletter for upcoming training dates or visit our shop to get started. Together, we'll turn whispers into impactful actions.
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COURSE DETAILS
Module 1 - Introduction to greenwashing
Communication of environmental practices
Historical Background and Drivers
Definition and Examples
Claim vs Executional Greenwashing
Taxonomy of Greenwashing
Greenwashing as Decoupling and Attention Deflection
Module 2 - Deceptive practices and greenwashing terms
Intentional or accidental greenwashing
Key terms and methods
Other deceptive practices incl green hushing, blue washing, impact washing, carbon washing, sustainable washing, eco-bling and more green
Module 3 - Impact and cost of greenwashing
Impact on sustainable investing
Current state of misleading claims
Investor and consumer awareness
Cost of getting it wrong
Module 4 - Tackling greenwashing
Sustainable Development Goals (SDGs)
Legal and Regulatory Frameworks:
EU Green Claims Directive
UK Green Claims Code
Advertising Standards Authority
EU Sustainable Financial Disclosure Regime and UK Sustainable Disclosure Requirements and Investment Labels incl FCA Greenwashing Rule
ISO Environmental Management System
EU Ecolabel and other Certification Marks
Lack of harmonisation increases risk of greenwashing
Whistleblowing and greenwashing
Module 5 - Anti-greenwashing frameworks
How to create an anti-Greenwashing framework across your business:
Policies and Procedures
Due Diligence, Surveillance and Monitoring
Other considerations
Operational resilience testing
