The message from European supervisory authorities is clear: greenwashing is not just a matter of communication or disclosure — it is an issue of risk management, particularly with regard to litigation, reputational risks, and regulatory concerns.

Financial institutions are expected to identify potential sources of greenwashing, assess the associated risks, and establish appropriate governance and control mechanisms to ensure that sustainability-related disclosures are accurate, substantive, and up-to-date, and fairly reflect the underlying institution, product, or activity. In particular, institutions that offer or finance green products, issue sustainability-related disclosures, support bonds or transactions bearing a sustainability label in the area of sustainable finance, or communicate ESG strategies and commitments to clients, investors, and other market participants should exercise particular caution.

From regulatory expectations to practical implementation

In practice, greenwashing risk management requires a structured approach to identify, prevent, and manage risks at both the institutional level and the level of individual products or activities. Our Greenwashing Navigator presents a pragmatic way to reduce and manage greenwashing risks, which includes the following:

  • Regulatory context and supervisory expectations on greenwashing
  • Identification of key sources and drivers of greenwashing risk
  • Assessment of sustainability-related claims, disclosures, and data quality
  • Integration of greenwashing risk into governance, controls and risk management processes
  • Clear documentation of mitigating actions and remediation measures

With the BDO Greenwashing Navigator, we combine regulatory expertise, market knowledge, and practical implementation experience to help institutions translate regulatory expectations related to greenwashing into practical, audit-ready, and institution-specific risk management solutions. These solutions increase transparency, strengthen stakeholder trust, and create tangible value by embedding measures to address greenwashing within the institution’s overarching ESG and risk management framework.

BDO Greenwashing Navigator

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