Why greenwashing matters
It can misallocate capital, mislead clients, create regulatory and reputational exposure, and weaken trust.
How it is applied
Reviewers compare claims with mandate, holdings, methodology, exclusions, data, targets, voting, outcomes, and legal disclosures.
Portfolio example
A fund markets itself as fossil-free while retaining material exposure through poorly disclosed subsidiaries.
How to interpret it
An inaccurate claim can arise from weak controls as well as intent. Evidence and specificity are more useful than labels.
Limitations and common misconceptions
Sustainability definitions evolve, data are incomplete, and reasonable methodologies can differ.
Sources and further reading
- What is Responsible Investment?Principles for Responsible Investment