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ARTICLE · 20 SEPTEMBER 2022

Mind the splashback: greenwashing and greywashing in sustainability-linked financing

Corrs Chambers Westgarth
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Participants in the sustainability-linked loan market need to protect their reputations and limit their liability.

AustraliaFinance and Banking
Adam Stapledon
Adam Stapledon
James Abbott
James Abbott
Emma Avery
Emma Avery
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With an ever-increasing stakeholder focus on environmental, social and governance (ESG) outcomes, the corporate world moving to align its objectives with the goal of a net zero carbon economy and an estimated US$1 trillion of sustainable debt expected to be issued this year alone, clear opportunities exist for borrowers and lenders in sustainability-linked financing, both in Australia and internationally.

Accompanying the exponential growth in sustainability-linked financing, however, has been increased scrutiny of the ESG credentials of the parties involved and, in cases where there is a perceived dissonance between reality and the ESG ambitions of the transaction, allegations of 'greenwashing' or 'greywashing'.

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