Explained | What is ‘greenwashing’?

The story so far: At the ongoing COP27 conference, Secretary-General of the United Nations, António Guterres said, “We must have zero tolerance for net-zero greenwashing.” He made the remarks during the launch of a report, titled ‘Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions’, by the organisation’s High-Level Expert Group, instituted in March this year. Referring to the recent net-zero commitments made by private companies and sovereigns, the Secretary-General observed that they had “varying levels of rigour and loopholes wide enough to drive a diesel truck through.” Catherine Mckenna, the chair of the committee, also expressed a similar viewpoint, saying that “bogus net-zero claims drive up the cost that ultimately everyone would pay. “If greenwash premised upon low-quality net zero pledges is not addressed, it will undermine the efforts of genuine leaders, creating both confusion, cynicism and a failure to deliver urgent climate action,” the High-Level expert committee’s report states. Among other things, the committee endeavours to institute norms for continuous enhancement of disclosures specific to ESG Schemes of Mutual Funds, with a particular focus on mitigating risks pertaining to mis-selling and ‘greenwashing’.