How to spot greenwashing – and how to stop it

Greenwashing could slow our progress towards meeting climate and social goals.
Here’s how policy-makers, organizations and consumers can spot it – and end it.

The adoption of the EU Sustainable Finance Taxonomy on 21st April – an investor’s guide that defines green investments – has become embroiled in a greenwashing scandal. This taxonomy was intended to be the EU Commission’s keystone regulation underpinning the sustainable finance pillar of the EU Green Deal, with the objective of preventing greenwashing.

However, after intense lobbying the final regulation may permit gas, a fossil fuel, to be labelled as ‘green.’ This ignores the environmental effects of methane, which has a climate impact up to 84 times greater than CO2 in a 20-year timeframe and which leaks from natural gas production. If gas leaks only 3% of its methane content, it causes even more warming than coal.

Sadly, the taxonomy that was to be the standard to prevent greenwashing may itself become an enabler of greenwashing.

What is greenwashing and how common is it?
Greenwashing refers to ‘green’ or ‘sustainable’ practices or products, while ignoring their total contribution to climate change and or the Sustainable Development Goals such as biodiversity or environmental pollution. Greenwashing generally takes two main forms: