ESG Investing For Dummies

Chapter 6

Highlighting Corporate Greenwashing

IN THIS CHAPTER

Considering the basics of greenwashing

Recognizing the risks of “coronawashing” to investors

There are many different definitions for greenwashing, but essentially, they all come back to the impression that a company is making unsupported or misleading claims about how environmentally friendly or socially responsible the company or their product is. In a number of cases, some of the environmental claims are partially true; however, companies engaged in greenwashing usually exaggerate their claims or the benefits of their products or services in an attempt to mislead consumers and other stakeholders.

This chapter covers corporate greenwashing and some issues to consider there, and then discusses how this also translates into greenwashing within financial products and investments. The chapter ends with an overview of a new practice, dubbed “coronawashing,” which has similar traits to greenwashing and was brought on by responses to the global COVID-19 pandemic of 2020.

The Grass Isn’t Always Greener: The Basics of Greenwashing

Greenwashing, from a product perspective, generally comes in two forms:

• Where companies spend more ...