Greenwashing and how to avoid it: an introductory guide for Asia's finance industry

There is a critical role for sustainable finance in enabling and facilitating the green transition. However, greenwashing has the potential to impede this transition by distorting the financial markets and undermining the effective allocation of capital.

Regulators and international bodies have begun to introduce standards and guidelines to address the various aspects in which greenwashing can arise in the finance sector. Enforcement against greenwashing is also on the rise, with a variety of regulators and actors commencing action against companies they consider to be misleading the market.

This introductory guide is intended for players in the Asian finance sector to understand issues surrounding the growing phenomenon of greenwashing in the industry. Apart from tracking the various forms of regulation and guidance being developed to address greenwashing, the guide provides a typology of enforcement action being taken against greenwashing across the globe and identifies cases at the greenwashing frontier. It also provides guidance on measures to guard against and avoid greenwashing.