Greenwashing: A New Topic in the Financial Industry

In recent years, the financial industry has faced increasing scrutiny over “greenwashing,” “social washing,” and “bluewashing” as a consequence of more stringent regulation provided by the EU Action Plan, the EU Taxonomy, the Green Deal, and the MiFID Regulation about sustainability and ESG (environmental, social, and governance) criteria which have become central to investment strategies. These terms describe misleading practices where companies or financial products are portrayed as more environmentally or socially responsible than they truly are. The European Union (EU) has taken a leading role in defining and addressing these issues to protect investors and ensure genuine progress toward sustainability.