Introduction
In response to the growing concerns related to greenwashing that
largely involve misleading claims regarding the environmental
benefits of Environment, Social, and Governance (ESG) labelled debt
securities, the International Financial Services Centres Authority
(IFSCA) has issued a circular on "Principles to mitigate the
Risk of Greenwashing in ESG Labelled Debt Securities in the
IFSC" on 21 November 2024 (Circular).
What is greenwashing
The term 'greenwashing' in general refers to exercising
acts of deception by making unsubstantiated, false, vague,
exaggerated or misleading claims regarding the sustainability
benefits associated with a product, service, or business operation.
The term may also encompass other deceptive practices including
concealment, omission, or hiding of relevant information in
sustainability claims and usage of words, labels, symbols, and
imagery that emphasize the positive environmental aspects while
masking or downplaying