Five Pillars to Guard Against Greenwashing in Asia’s Finance Industry

As the demand for sustainable finance grows, so does the risk of greenwashing. Financial institutions in Asia must adopt robust measures to ensure their green claims are credible and transparent. Here are five pillars to guard against greenwashing:

1. Screen Your Green

Accuracy is paramount. Ensure all green claims are specific, objective, and verifiable. Avoid vague terms and provide detailed explanations of the environmental impact of financial products.

2. In Good and Green Faith

Transparency is key. Clearly articulate how green objectives are integrated into financial products and their financial objectives. Ensure consistent messaging across all channels and provide disclaimers to clarify what the product does not do.

3. Walk Your Green Talk

Consistency matters. Align the company's green image with its internal actions and interactions with third parties. Ensure stewardship activities are active and aligned with green commitments, and obtain third-party verification to lend credibility.

4. Observe the Changing Shades of Green

Stay informed. Monitor evolving regulations and industry expectations in all relevant jurisdictions. Understand mandatory reporting obligations and ensure compliance with local and international standards.

5. Be Alert to Green Duties

Know your responsibilities. Ensure directors and fiduciaries manage climate risks effectively and comply with legal and fiduciary duties to investors and stakeholders. Regularly audit climate risk assessments and align governance strategies with green commitments.

By sticking to these five pillars, financial institutions can protect themselves from greenwashing risks and help drive the green transition in Asia. Implementing strong measures and staying updated on regulatory developments will help maintain market integrity and investor trust.

Read the guide now to lead the green transition with integrity here!