Driven by a regulatory tsunami and an ever-growing investor demand for solutions towards sustainable development, sustainability has found its way into the core businesses of financial institutions which have largely started to recognise sustainability not only as a risk, but also as an opportunity. The growing appetite for sustainable financial solutions, however, paired with the complexity of regulations comes with the risk of financial institutions misleading clients and investors about the (un)sustainable characteristics of their financial products and services. This so-called ‘greenwashing’ comes in many different forms – including ‘greenwishing’, when financial institutions truly believe in ESG but fail to achieve the communicated and intended impacts and results. As a consequence, regulators are now taking a closer look into the risks related to greenwashing and greenwishing. This PwC study examines the topic from a regulatory perspective, helping financial institutions grasp the essence of greenwashing and providing them with direction in the fast evolving field of sustainable finance.
The study highlights the developments with regard to Swiss and international supervisory authorities and their approaches to defining and tackling greenwashing risks. By analysing relevant supervisory guidelines and definitions, the study maps similarities and differences in the supervisors’ understanding of greenwashing and elaborates on the challenges faced by financial institutions in light of increasing greenwashing risks and a variety of supervisory approaches. Finally, the study presents possible ways for financial institutions to reduce their exposure to greenwashing risks as well as a framework for doing so.
Analysis of definitions of greenwashing from supervisory authorities around the world, including Switzerland, EU, Germany, France, UK, USA, Hong Kong and Singapore.
Collection and mapping of greenwashing scenarios from misleading fund names to confusing disclosure methods in order to reveal common patterns and focus areas..
Elaboration on challenges, strategies and a facilitated framework to prevent and manage greenwashing risks.
«The green regulatory tsunami increases legal and reputational risks related to greenwashing. This study provides guidance to financial institutions in the rapidly evolving field of sustainable finance.»
Sustainability & Regulatory Leader, PwC Switzerland
Tel: +41 58 792 45 23
Manager, Sustainability & Strategic Regulatory, PwC Switzerland
Tel: +41 58 792 26 87
Sustainability & Strategic Regulatory, PwC Switzerland
Tel: +41 58 792 11 19