The trend of sustainable investing and corporate social responsibility has increased demand for Environmental, Social, and Governance (ESG) disclosures. While this has resulted in an increase in disclosures, Greenwashing has also become a problem. When an issuer’s publicly stated sustainability profile and the features and/or goals of a financial instrument or financial product, either by action or omission, do not accurately reflect the underlying sustainability risks and impacts associated with that issuer, financial instrument, or financial product, this is known as “greenwashing”. Despite efforts to prevent greenwashing, such as regulations in the European Union, the problem persists worldwide. This paper will thoroughly study this topic through the lens of ESG disclosure regulations. It compares the situation of ESG disclosures with greenwashing in the Europe Union with the United States of America and highlights the challenges and needs for more effective measures to ensure accurate and transparent ESG disclosures and aims to prevent greenwashing. It proposes that by comparing different approaches, policymakers can identify the strengths and weaknesses of each while using this information to develop an internationally standardized, comprehensive, and effective framework for ESG disclosure regulations.