应对“洗绿”挑战：国际监管趋势概览-The Challenge of Greenwashing An International Regulatory Overview

TheChallengeof

Greenwashing:

AnInternational

RegulatoryOverview

Greenwashingrulesbyjurisdiction

Introduction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

TheChallengeofGreenwashing

GreenClaims:Realcommitmentormarketingstategy?

Consumers,investors,regulatorsandthepublicingeneralareincreasinglydemandingtransparencyandsustainablepracticesfromcompanies.Thistrendishavingsignificantimpactoncompaniesaroundtheworld,astheyreactadoptingESGcommitmentspublicly.Asaresult,theglobalmarketexpectschangesinorganizations’behaviorsandmessagingaroundsustainability.

“Sustainable”,“carbonneutral”or“net-zerowaste”aregreenclaimsthathavebeenaddedtomanyproductsandservicesaroundtheworld.ItalsoservescompaniestoeffectivelycommunicatesomeoftheirESGcommitments.However,aretheirclaimsreallysubstantiated?Insomecasestheseclaimsarenotfullybasedonfactsorsubstance.

Thispaperaimstoshowtherisksthatunsubstantiatedormisleadinginformationandclaimsonsustainabilitymaytriggerforcorporatesandgovernments.Greenwashingaccusationsmayhaverelevantreputationalandlegalrisksforcompanies.

Moreover,whileinternationalstandardsarebeingdeveloped,suchastheIFRS’sISSBsortheEU’sESRS’s,thelandscapecontinuestobeimmatureadding’tothechallengeforcompaniestryingtoavoidgreenwashing.Aspreventinggreenwashingpracticesis

becomingapriorityforregulatorsandsupervisoryauthorities,anoverviewofthemainregulationsin25jurisdictionsisgiven

showcasingthegeneraltrends.

Let’skickoffwithsomenumbers:

TheChallengeofGreenwashing:AnInternationalOverview

2

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Greenwashingrulesbyjurisdiction

Introduction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

GreenwashingStatistics:A2023GlobalPerspective

CEOsperpectivesonESG

69%

Haveadaptedtheclimate-relatedlanguageandterminologyusedtomeetchangingstakeholdersneeds.

66%

OfCEOsadmittheyaren’tpreparedtowithstandpotentialshareholderscrutiny.

Source:”KPMG2024CEOOutlook”

/content/dam/kpmg/sg/pdf/2024/09/kpmg-ceo-outlook-2024-executive-summary.pdf

BySectors

19%15%10%

OilandGas

Bankingand

FinancialServices

TravelandAirlines

PercentageofESGriskincidentslinkedtomisleading

communicationonclimatechange,GHGemissions,andglobalpollution.DatacoversfromJanuarytoSeptember2023.

Source:

referencedbytheEuropeanBankingAuthority(EBA)initsFinalReporton“GreenwashingMonitoring

andSupervision.”Ehenismoluptaturreseritdoloreautoffictem.Musintautvoluptatisimpeperepudio.Et

72%40%53%

ofConsumerswanttoreducetheirenvironmentalimpact

ofEUGreenClaimsfoundtobe“completelyunsubstantiated”

ofEUGreenClaimsfoundtobe

“vague,misleadingorunfounded”

Source:

StatementofReasonsoftheEUProposalonGreenClaimsDirective.

GrowingComplexityoftheGreenwashigRegulatoryLandscape

Thisreportprovidesacomprehensivemappingofgreenwashingregulationsacross25jurisdictions.Clickonthemaptodirectlyaccessthespecificrulesandguidelinesforeachjurisdiction.

Participatingjurisdictions:Australia,Austria,Belgium,Brazil,

Canada,Chile,Colombia,Finland,France,Germany,Indonesia,

Ireland,Italy,Malaysia,Mexico,Netherlands,Norway,Romania,Singapore,SouthAfrica,Spain,Taiwan,Thailand,UnitedKingdom.andUnitedStates.

TheChallengeofGreenwashing:AnInternationalOverview

3

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Greenwashingrulesbyjurisdiction

Introduction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

GreenwashingontheNews

Accusationsofgreenwashingaresurging,

andgovernmentalscrutinyisintensifying.

Stakeholderssuchasconsumers,employees,andboardmembersarenowmorevigilant

thanever,consideringgreenwashingrisks

whenevaluatingcompanies.Navigating

thenumerousexistingframeworksand

internationalstandardsbecomescrucial

toanyorganizationcommittedtogenuine

sustainability.Understandingthesedynamicsiscrucialforanyorganizationcommittedtogenuinesustainability.

TheChallengeofGreenwashing:AnInternationalOverview

4

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Greenwashingrulesbyjurisdiction

Introduction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

WhataretheFiveKeyQuestionstoAskYourself?

3

5

2

4

Whatrisks

doIfaceif

accusedof

greenwashing

?

Howarethedifferent

jurisdictionsapproachingorpreventinggreenwashing

?

WhatshouldIconsider

whenmakingagreenclaim

?

Whoisdrivingtherisein

greenwashingaccusations

?

Damagetocorporatereputation.Legalandlitigationrisks.

Theriskof

greenwashing

isincreasingfor

companiesglobally,makingitessential

forthemtoaccuratelyunderstand,analyze,andstayinformed

aboutrelevanttrends.

Identifypotential

sourcesofrisk

whenmakinggreen

claims.Howto

substantiatemy

claims.Consequencesofnotcomplyingwithrequiredobligations.

AccusationsfromNGOsandactivistorganisations.

Accusationsfrom

businesscompetitors.Accusationsfrom

stakeholders.

1

Inwhatcorporate

activitiescangreenwashingpracticesarise

?

•

Attheproduct,serviceorbusinessoperationlevel:“Whatyousell”Attheentitylevel:

“Whatyousay”Atthecounterparty

(suppliers)level:

“Whatyouserve”

TheChallengeofGreenwashing:AnInternationalOverview5

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Law

Greenwashingrulesbyjurisdiction

Introduction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

Contents

01.KPMGInternationalOverview7

02.

Originanddefinitionofgreenwashing

Howdidgreenwashingoriginate?Whatismeantbygreenwashing?Greenwashingbysectors

Whattypesofenvironmentalclaimscangiverisetogreenwashingrisk?Howdoesgreenwashingmaterialise?

Whataretheconsequences?

9

10

11

12

13

14

15

03.

Whatfactorshavecontributedtothedevelopment

ofgreenwashingpractices?

16

04.

Whatarethemainrisksassociatedwithgreenwashing?

18

05.

Whatcompliancemechanismstomitigatetheriskofgreenwashing?

23

06.

Isthereastandardlegaldefinitionofgreenwashing?

Howarethedifferentjurisdictionsapproachingorpreventinggreenwashing?Aspecialfocusonthefinancialsector

25

26

27

07.Greenwashingrulesbyjurisdictions29

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview6

Law

IntroductionKPMGInternationalOverview

Greenwashingrulesbyjurisdiction

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

01.

KPMG

InternationalOverview

Law

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview7

IntroductionKPMGInternationalOverview

Greenwashingrulesbyjurisdiction

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Mainrisks

KPMGinternationalOverview

Greenwashingisthetermcommonlyusedforamarketingstrategyusedby

somecompaniestoappearmoreenvironmentallyfriendlythantheyactually

are.Thisdeceptivemarketingpracticeinvolvesusingusingfalseormisleadingcommunicationtopositiontheirproducts,servicesorbusiness,capitalisingonthegrowingenvironmentalconsciousnessamongconsumersandinvestors.

Anotablesurgeinpublicawarenessoftheneedtotransitiontoamoresustainablewayoflifehas

fuelledtheadoptionof‘green’practices–andtheirsignificanceforpurchasingdecisions.A2023

studycarriedoutby

KPMGintheUK

foundthat50%ofconsumersarewillingtopaymoreforsustainableproducts.Thattrendmayincreaseasyoungergenerations,whoarelikelytoplaceevengreatervalueonclimateconcerns,growintotheirpurchasingpower.

Thedemandforenvironmentally-friendlyproductshaspromptedcompaniesandinvestorsaliketo

recognisethelong-termadvantagesandgrowthopportunitiesassociatedwithsustainabilityandto

utiliseitasamarketdifferentiator.Greenclaimsandinformationonsustainabilitymustbeclear,notmisleadingandsubstantiatedinordertoavoidgreenwashingaccusations.

KPMGGlobalgreenwashingsurvey

Thisreportgathersthefindingsderivedfromtheanalysisofinformationregardinggreenwashing

accusationsandregulationsacross25jurisdictions.LegalspecialistsfromKPMGfirmsinthese

jurisdictionshavecontributedtothiscomparativeguidewhichillustratesthewaysparticipating

jurisdictionstacklegreenwashing,fromspecificregulatorymeasurestogeneralregulations,suchas

ConsumerProtectionlawsandAnticompetitiverules.Thisreportconsidersrepresentativegreenwashingcasesfromeachjurisdictiontoidentifygreenwashingtrendsfromaregulatoryenforcementandprivatelitigationperspective.

KPMGprofessionalshavealsoconsideredthespecificimpactonthefinancialservicessector,wheredisclosureofcorporateclimatetransitionplansandtransparencyonthesustainabilityoffinancial

instrumentsarefundamentalprerequisitesforeffectivecapitalallocationandclimateriskmanagement.

Juristictionscoveredingreenwashingsurvey

Australia,Austria,Belgium,Brazil,Canada,Chile,Colombia,Finland,France,Germany,Indonesia,Ireland,Italy,Malaysia,Mexico,Netherlands,Norway,Romania,Singapore,SouthAfrica,Spain,Taiwan,Thailand,UnitedKingdomandUnitedStates

A2023studycarriedoutby

KPMGintheUK

foundthat50%ofconsumersarewillingtopaymoreforsustainableproducts

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview8

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

02.

Originand

definitionofgreenwashing

Law

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview9

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Howdid

greenwashingoriginate?

‘Greenwashing’wascoinedbyenvironmentalistJayWesterveldin1986toexposethepracticesofsomehotelsthaturgedgueststoreusetowelswhilewastingresourceselsewhere.Theterm

wasmorebroadlyadoptedasaresponsetomarketingstrategiesthatsoughttocapitaliseongrowingenvironmentalawarenesswithoutagenuinecommitmenttosustainability.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview10

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Whatismeantbygreenwashing?

Greenwashingcanbeunderstoodasdeceptive

marketingpracticesusedbycompaniestocreate

afalseimpressionofenvironmentalresponsibility.

Thisstrategyinvolvesprovidingmisleadingorfalseinformationabouttheenvironmentalimpactofa

company’sproducts,servicesoroperationstoappearmoreeco-friendlythantheyactuallyare.

Commonfeaturesofgreenwashinginclude:

1

Informationaboutproductsthatisnotexpresslywrong,butismisleading,suchasbyoverstatingcertaincharacteristics.

2

Communicationsthatomitrelevantinformation,

makingthemmisleadingtoconsumers,investors,orothermarketparticipants.

3

Statementsthataretoogenericandvague,suchthattheycan’tbesubstantiated.

4

Thepresentationofcompanyobjectivesthatdisguisesthelackofambitionoralignmenttobroadergoals.

Reframethedebate

Thecriteriaforwhatqualifiesasgreenorsustainable

canbesubjecttointerpretationinthecurrent

regulatorylandscapewhereinthemajorityofthecasesthereisnospecificregulationongreenwashing,but

generalregulations,suchasConsumerProtectionlawsandAnticompetitionrules.

Withoutclearguidelines,companiesmaybelieve

theyareactingwithinacceptableboundaries

whenmakingsustainabilityclaims.Forthisreason,

businessesneedtoreframethedebatetoincludetheintentionalityfactoringreenwashing.Thisinclusioniscrucialforprovidingclarityandensuringaccountability,helpingtodifferentiatebetweengenuinesustainability

effortsanddeceptivepractices.Thisshowsthe

importancethatrobustindependentassurancemayhave.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview11

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Greenwashingbysectors

Overtheyearstherehavebeenanumberofnotable

casesofgreenwashingincommunicationandadvertisingcampaignsbylargemultinationalsinarangeofsectors

–fromthoseassociatedwithfossilfuels,throughto

consumerfocusedbusinessesinthefashion,cosmetics,mobiletechnology,decoration,orfastfoodsectors,aswellasfinancialservicesbusinesses.

Ofthese,thefinancialservicessectorplaysaparticularlyimportantroleinfinancing,andinsuring,thetransitiontoasustainableeconomy.Achievingaglobalnetzero

economywillcomeatacost.Accordingtoareporttitled

“TheFutureofEuropeanCompetitiveness”,published

inSeptember2024byMarioDraghi,theformerPresident

oftheEuropeanCentralBank,Europemustinvest€800

billionby2030inordertoachievethe2030climategoalsandensurethecompetitivenessofitsindustries.Mobilisingprivateinvestmentisessentialtoachievethisambitious

goal.Simultaneously,financialinstitutionsshouldbeseekingtoensurethattheirinvestmentsandinfluencealignwith

pathwaysthatscaleupclimatemitigationacrossallsectorsandregions.Fortheseresourcestobeproperlyallocated,informationmustbereliable,clearandnotmisleading–

makingtheeradicationofgreenwashinganecessity.

Shiftingbreakdownofsectorslinkedtoclimategreenwashing

Shareofgreenwashingriskincidents

100

80

60

40

20

0

201820192020202120222023

Incidentyear

Other

Retail,personalandhouseholdgoods

Foodandbeverage

BankingandfinancialservicesOilandgas

Travelandairlines

IndustrialsandconstructionMining

Utilities

BasedonnumberofESGrisk

incidentslinkedtomisleading

communicationsurroundingclimatechange,GHGemissions,andglobalpollution.2023valuesreflectdatafromJanuarytoSeptemberattimeofpublication.

SourcereferencedbytheEuropeanBankingAuthority(EBA)inits

FinalReporton“GreenwashingMonitoringandSupervision”

/

news-research/reports/on-

therise-navigating-the-wave-of-greenwashing-and-social-washing

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview12

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Whattypesofenvironmentalclaimscangiverisetogreenwashingrisk?

Someofthecommonpitfallsthatmayleadtogreenwashingrisks:

Unsubstantiatedclaims.

Thesecanmanifestasoverstatedorunverifiednumbers,whichmaybe

presentedwithoutproperevidence.Somecompaniesmayuseoutdatedstandardstomeasureandpresent

theirperformance,whichcancreateafalseimpression.Someorganizationsfrequentlyfacecriticismforclaimingambitiousfuturegoalswithout

makingtangibleimprovements,

highlightingadisconnectbetweenintentionandaction.

Dubiouslabelsandterminology.

Somecompaniesmayusevague

termswithoutproperexplanation,

leavingconsumersunclearabouttheactualenvironmentalbenefits,oruseinspirationaladjectivesinnamesandsloganswhilehidingtheinformationalpartinthesmallprint.Some

businesseshavealsopromotedalineofproductsas‘ecofriendly’,when

theywerethesameasconventionalones,withoutprovidinganyevidencetosupportthisdifferentiation.

Focusingonasingleattribute.

Thisoccurswhencompaniesprovideincompleteinformation,emphasisingonepositiveattributewhileignoringthenegativeenvironmentalimpacts.Suchpracticespreventconsumers

fromunderstandingthefull

environmentalimpactofaproductorservice

Misleadingimagery.

Somecompaniesmayuseimagerythatsuggestsenvironmentalbenefitswithoutsupportingevidence.

Advertisingcampaignsthat

exaggeratesustainableefforts.

Somecompaniesmaylaunch

advertisingcampaignsthatoverstatetheircommitmenttosustainability,highlightingminoreco-friendly

initiativesasmajorachievements,orclaimsignificantenvironmentalbenefitsfromsmallinsignificantactions.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview13

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Howdoesgreenwashingmaterialise?

Itisacceptedthatacompany’sclimateimpactcannotbelookedatinisolation.However,asignificantchallenge

issourcingaccuratedatatoassessthesustainability

credentialsofcounterparties.Toaddressthis,theCorporateSustainabilityDueDiligenceDirective(CSDDD)focusesonensuringresponsiblebusinessconductthroughacompany’s

chainofactivities.Effectivelyidentifyingandmitigatingtheserisksisessentialformaintainingsustainabilitythroughout

acompany’ssupplychain–andforavoidinginadvertentgreenwashing.

Informationmustbefair,clear,andnotmisleading:

greenwashingcanhaveagreatimpactonconsumertrust

andcorporatereliability.TheimportanceofthisisexemplifiedintherecitalstotheEuropeanCommission’sProposalforthe

GreenClaimsDirective:“Ifenvironmentalclaimsarenot

reliable,comparableandverifiable,consumersandothermarketactorscannotfullyleveragetheirpurchasingdecisionstorewardbetterenvironmentalperformance.Similarly,thelackofreliable,comparableandverifiableinformationhindersincentivesfor

optimizingenvironmentalperformance,whichwouldtypicallygohandinhandwithefficiencygainsandcostsavingsfor

companiesalongthesupplychainaswell.”

Greenwashingpracticescanariseacrossthespectrumofcorporateactivity

Whatyousell:

Whatyousay:

Whomyouserve:

Theproduct,serviceorbusinessoperationlevel

Theentitylevel

Thecounterpartylevel

Corporateclimatetransitionplansarecriticalforachievingaglobalnet-zeroeconomy.Theyarealsoessentialforfinancialinstitutionstoeffectivelyallocatetheircapitaltogenuinely

sustainablecompanies.ThisisreflectedbytheEuropean

Commission’sapproachintheCorporateSustainability

ReportingDirective(CSRD).TheEuropeanSustainability

ReportingStandards(ESRS),whichsettherequirementsforfutureCSRDreporting,detail(amongstmanyotherthings)

thenecessarycomponentsforbothcorporateclimateand

biodiversitytransitionplans.Greaterrequirementstopubliciseplanswillincreasethepotentialexposuretogreenwashingatthislevel.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview14

Law

Originanddefinition

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Introduction

Mainrisks

Whataretheconsequences?

Theconsequencesofgreenwashingcanbesignificantforindividual,corporatesandsocietyasawhole.

Consequences

forconsumers

Forconsumerswhofallvictimtogreenwashing,thiscanleadto

purchasingdecisionsmadeon

falseinformation,affectingnot

onlytheirsatisfactionbutalso

underminingtrustincompanies

andsustainabilitymessagingin

general.Feelingdeceivedand

disillusioned,consumersmay

becomemorescepticalandless

inclinedtorespondtogreenclaimsinmarketing.Thismayhavethe

unintendedconsequenceofreducingtheincentiveoncompaniestoadoptsustainablepractices.

Consequences

forcorporates

Forcorporatesthatdoengagein

greenwashing,theywillfacetheriskof

reputationaldamage,lossofconsumer

confidence,theimpositionoffinancial

penaltiesorbehaviouralremedies,aswellaspotentialprivatelitigation.Theremay,

however,beconsequencesevenforthosewhodoensuretheyactinatransparent

andresponsiblemanner.Duetothe

complexityintheregulatoryframeworks

andthelackofclearandconsistent

standards,companiescanbeaccusedofgreenwashingevenwhentherehasbeennointenttodeceive.Asgoodintentions

arenotalwaysrewarded,somecompanieswillstaysilentoutoffearofbeingcalled

out.Thisemergingtendency,knownasgreenhushing,canbeasdamagingasgreenwashing,asagainitunderminestheincentivestodrivesustainabilityandtransparency.

Consequences

forsociety

Greenwashingmayalso

underminetheeffectiveness

ofregulatorypoliciesasmarketparticipantsmaycircumvent

regulationsbyhidingtheirclimatefootprint.Thiscanslowdownthetransformationoftheeconomy,

resultinginincreasedrisks

andnecessitatingmoredrasticinterventions.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview15

Law

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Greenwashingpractices

Compliancemechanisms

Regulatorydefinition

Originanddefinition

Introduction

Mainrisks

03.

Whatfactorshavecontributedto

thedevelopmentofgreenwashingpractices?

Law

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview16

OriginanddefinitionGreenwashingpractices

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Compliancemechanisms

Regulatorydefinition

Introduction

Mainrisks

Whatfactorshavecontributedtothedevelopmentof

greenwashingpractices?

Lackofenforceabilityofinternationalstandards

Internationalstandardsoncorporatenon-financialinformationarebeingdevelopedatpaceandwillhelpbringmoretransparency,however,thefactthatmultiplejurisdiction-specificrulesmayapplycreatescomplexity.Accountabilityandincentivesplaypivotalrolesindrivingpositivechange.However,

theinconsistencyandcomplexityofframeworksandstandards,includingtheGlobalReportingInitiative

(GRI)standards,theESRS,theEUTaxonomyforSustainableActivities,andtheInternationalSustainabilityReportingStandards(ISSB)oftheIFRSFoundation,mayfurtherexacerbatethechallenge.

Competitivepressureandmarketopportunities

Assustainabilitybecomesastrategicprioritytogainacompetitiveedge,somecompaniesmay

beincentivisedtoengageinborderlinedeceptivepracticestoaligntheirperformanceandpositioningwiththesenewmarketexpectations.Thisenablesthemtoprojectanenvironmentallyfriendlyimage,

outperformcompetitors,andcapitaliseontheemergingtrend.

Marketopportunitiesassociatedwithgreenwashingtacticscannotbeoverlooked;growingconsumerdemandforenvironmentallyfriendlyproductsandservicespresentscompanieswithopportunitiestoexploitthesepreferences.Financialincentivesfurtherdrivesomecompaniestoengageingreenwashingpractices,offeringshort-termbenefitsbutposingsignificantlong-termriskstobothbusinessesandsociety.

©2024CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

TheChallengeofGreenwashing:AnInternationalOverview17

Law

Greenwashingrulesbyjurisdiction

KPMGInternationalOverview

Mainrisks

Compliancemechanisms

Greenwashingpractices

Regulatorydefinition

Originanddefinition

Introduction

04.

Whatarethe

mainrisks

associatedwithgreenwashing?

Law

©2024Copyrightownedbyone