Misleading ESG Claims – Will They Wash?

'Greenwashing' is the practice of a company providing information on its environmental, social and corporate governance (ESG) policies, or its products and practices, with the intent to present an environmentally responsible public image that masks harmful business practices. Legislators globally are issuing a spate of new rules and guidance requiring adverse environmental, human rights, or governance issues to be considered, disclosed and even mitigated by companies.

There also is growing pressure from consumers and regulators. Consumers are increasingly seeking out products and services with strong ESG credentials and reportedly are willing to pay up to a 9% premium for 'environmentally friendly' products. Unsurprisingly, companies are seeking to leverage this consumer premium in the way that they advertise and market their products and services. However, a 2021 report published by the UK Competition and Markets Authority (CMA) found that 40% of green claims made