Greenwashing andhow to avoid it:
An introductory
guide for Asia’s
finance industry

ABOUT THE AUTHORSThis guide was co-written by ClientEarth and the Asia Investor Group on Climate Change, together with external
consultant Daisy Mallett.
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earthfor – and with – its inhabitants. It tackles climate change, protects nature and stops pollution, with partners andcitizens around the globe. In Asia, we work with the private sector, civil society and government regulators to
support the net zero transition through capacity building and legal analysis on topical issues on climate change,sustainability and the environment. From our offices in Europe, Asia and the USA we help build a future for ourplanet in which people and nature can thrive together.
The Asia Investor Group on Climate Change (AIGCC) is an initiative to create awareness and encourage action
among Asia’s asset owners and asset managers about the risks and opportunities associated with climatechange and low-carbon investing. AIGCC provides capacity for investors to share best practice and peer-topeer learning on sustainable investment, risk management, corporate engagement and policy advocacy. Witha strong international profile and significant network, AIGCC represents the Asian investor perspective in the
evolving global discussions on climate change and the transition to a greener economy. AIGCC members comefrom 11 markets and with over USD 31 trillion in assets under management. www.aigcc.net

Co-authors:
Sean D. Tseng (ClientEarth)
Daisy Mallett (external consultant)Anjali Viswamohanan (AIGCC)
Manisha Regalla (AIGCC)
With thanks to the following contributors:
From AIGCC: 		
Firdaus Anuar, Rebecca Mikula-Wright, Monica Bae, Serena Li, and Valerie Kwan
From ClientEarth: Alex Lombos, Camille Sippel, Elizabeth Wu, Fan Danting, Jamie Sawyer,
Jonathan White, Kyoko Okuyama, Peter Barnett, Raphael Soffer, and Robert Clarke
April 2023
Disclaimer: The contents of this document are for general information purposes only. It is intended toprovide an overview of the subject matter, and does not state AIGCC’s or ClientEarth’s own position orviews. This document does not cover the whole of the relevant law on the subject, and does not constitutelegal advice. Nothing stated in this document should be treated as an authoritative statement of the law
on any particular aspect or in any specific case. Action should not be taken on the basis of this document
alone. While efforts have been taken to ensure that the information herein is correct, no warranty, express
or implied, is given as to its accuracy and no responsibility is accepted for any decisions made in relianceon this document. This document is a summary reference resource to the point in time at which it is issued,
and to remain current may require updating.

Contents

FOREWORD

1

A. EXECUTIVE SUMMARY

2

B. GREENWASHING: AN OVERVIEW

3

A definition
The problem with greenwashing
Tracking the rise
Heightened scrutiny

3
3
4
5

C. EVOLVING REGULATION AND GUIDANCE

6International developments
Climate disclosure standards
Labelling standards
Standards on green ratings and criteria
Green taxonomies
Net zero integrity

6
7
8
8
9
10

D. ENFORCEMENT ACTION AGAINST GREENWASHING

11

Classifying forms of greenwashing and enforcement action
Legal grounds for claims against companies for greenwashingConsequences of greenwashing
The next frontier of greenwashing claims

12
16
17
18

E. GUARDING AGAINST GREENWASHING: THE FIVE PILLARS

19

Screen your green
In good and green faith
Walk your green talkObserve the changing shades of green
Be alert to green duties

19
20
22
23
23

F. CONCLUSION

24

FOREWORD
By Herry Cho

its crucial role in climate finance, especially given its
nascent stage in Asia. This may lead to a loss of publictrust in the short-term and prevention of effective
allocation of resources for impactful climate action in
the long-term.
At SGX Group, we have been actively looking at
mechanisms to ensure transparency of intentions offinancial institutions that operate in the sustainability
space. We recently launched the SGX Sustainable
Fixed Income initiative, with an aim to help investors
identify fixed income securities that meet recognised
green, social or sustainability standards.

The impact of climate change is particularly acutein Asia, as the region is one of the most climate
vulnerable areas globally. The challenge to balance
economic growth together with managing climate
vulnerabilities requires a multi-faceted approach.
There is an increased awareness regarding the rolethat businesses need to play in mobilising climate
action from the bottom-up.
Sustainable finance has therefore become a criticalfocus. Growing awareness of the risks from climatechange, and the urgency to act to prevent its mostcatastrophic consequences, have driven investors
to invest ‘green’, creating an unprecedented green
market opportunity. Likewise, the expectations that
consumers place on companies, investors, andregulators to incorporate aspects of sustainability andrespond to climate concerns are at an all-time high.
Since the Paris Agreement in 2015, the financial
sector has been actively engaging on understanding
the impact of climate change on investments andproposing solutions to address climate issues – forexample, by developing sustainability-related financial
products that have been contributing towards
nationally determined contributions and beyond, andsector-specific net zero goals. As investors advancetheir climate action strategies, they will face raised
scrutiny and expectations from their stakeholders.
The lack of global consensus and uniformity has attimes allowed certain actors in the financial markets tosubstantiate insufficiently with respect to the impactof their products or practices on climate action. In
other cases, well-meaning investors have not beenspared from greenwashing allegations due to a lack ofmarket clarity on claims that are ‘green.’
Regardless of investors’ intentions, greenwashing canhave a devastating effect on the overall market and1

Investors will benefit from the assurance that thesesecurities have been independently checked to alignwith recognised standards, as well as continued public
disclosures of material developments that may affectalignment with the recognised standards.
The use of transparency as a mitigant against
greenwashing also flows through in products wedevelop including with partners. For example, both
Scientific Beta’s (SGX Group’s subsidiary) Climate
Impact Consistent Indices and our work with MSCI
on the recently launched Climate Action Indiceswere designed with a rules-based and transparent
methodology to allow investors to understand how theclimate indicators drive decarbonisation and support
the transition in the real economy.
Greenwashing and how to avoid it: An introductory
guide for Asia’s Finance Industry is a useful reportfor all stakeholders in the financial sector, including
regulators, to better understand what greenwashingis, where greenwashing concerns currently stem from,and how greenwashing may evolve in the future.
The report provides guidance and practical steps
to guard against greenwashing risks that we hopefinancial institutions find useful and can implement. The
forward-looking approach of the report is particularly
helpful for institutions to reflect on and evaluate theirclimate governance and communication strategies
to ensure transparency of their intentions on
climate action.

HERRY CHOManaging Director
Head of Sustainability and Sustainable Finance
SGX Group

A. EXECUTIVE SUMMARY

This is an introductory guide intended for players in the Asian finance sector, including asset managers,banks, institutional investors, and regulators, to understand issues surrounding the growing phenomenonof greenwashing in the industry. It addresses the prevalence of greenwashing in financial markets in Asia,and provides an overview of the various forms of regulation and guidance being developed to address
it. It provides a typology of enforcement action being taken by a variety of regulatory bodies and actors
against greenwashing across the globe, and identifies cases at the greenwashing frontier. It also provides
guidance on measures to guard against greenwashing risk.
Greenwashing poses a risk as it has the potential to significantly impede the green transition by distorting thefinancial markets and undermining the allocation of capital to the green transition. While civil society has been
key to identifying and prosecuting greenwashing, regulators are also increasing their scrutiny of this issue.
Regulators and international bodies have begun introducing standards and guidelines. Regulatory
standards and guidance have been rapidly evolving, being issued at the international, regional, and domestic
levels. Standards and regulations that can be used to help identify and prevent greenwashing when usedcomprehensively, have been observed to fall into one of five categories: (1) climate disclosure and accounting,(2) labelling standards, (3) standards on green ratings and criteria, (4) green taxonomies, and (5) net zero
integrity standards. All these seek to address the various aspects in which greenwashing can arise in thefinance sector.
Enforcement action against greenwashing is also on the rise, with a variety of regulators and actors
commencing enforcement proceedings against companies they consider to be misleading the market. The
types of greenwashing which have attracted enforcement action include: (a) brand greenwashing, which
relates to the overall greenwashing of an organisation’s profile, activities, and ambitions, (b) fund / productgreenwashing, which relates to the mislabelling or mis-selling of products, (c) greenwashed financing,whereby green financing is provided to assets that are themselves greenwashed, and (d) financial reporting
greenwashing, where financial institutions make false or misleading statements in relation to environmentalrelated disclosures. These claims have had a multitude of legal foundations which draw upon existing laws
and regulations. Additionally, a new wave of greenwashing cases is emerging that may well attract legal
sanction too. These include “transition-washing”, greenwashing via offsets, and greenwashing claims broughtby competitors.
This guide provides key recommendations to guard against greenwashing risk. These are summarised underthe ‘five pillars’ as follows:
1. Screen your green: Scrutinise the accuracy and credibility of any green statement;
2. In good and green faith: Be transparent about how green objectives are integrated into the financial
product and/or its financial objective;
3. Walk your green talk: Ensure the company or fund’s green image is consistent with the internal actions of
the company or fund and their actions in relation to third parties;
4. Observe the changing shades of green: Expectations and regulations are rapidly evolving, so monitor
developments in relevant jurisdictions;
5. Be alert to green duties: Know your legal and fiduciary duties to investors, beneficiaries and stakeholders.
In setting out the above, this guide aims to assist the Asian financial industry in identifying greenwashing risks
within their own organisations and those that they invest in, and help in identifying relevant considerations
for mitigating them. The guide is also intended to assist regulators in Asia, bringing attention to the forms ofgreenwashing which are emerging, and providing an overview of the types of regulation and legal action taking
place in Asia and beyond.
2

B. GREENWASHING: AN OVERVIEW
There is a critical and urgent role for sustainable finance to prevent and protect against the impacts of climatechange in Asia. The rising awareness of the impacts of climate change has resulted in an immense green
market opportunity for investors.
However, this appetite for environmentally sustainable financial products has grown in tandem with the levelof greenwashing in the market. This has occurred in a relatively barren regulatory landscape, with inadequate
guidance and oversight as to what constitutes a ‘green’ financial product or company, and how these should
be marketed. Across Asia, combating the greenwashing phenomenon means closing this regulatory gap andtaking appropriate legal action. However, this has led to a complex and evolving landscape for which clarity on
identifying an ever-expanding typology of greenwashing claims, and the frameworks meant to address it, has
become difficult.
This practical guide seeks to address that challenge. It analyses greenwashing in the context of financial
markets in Asia, providing an overview of the types of greenwashing to be alert to, and the legal and otherrisks associated with such greenwashing. Both international and regional regulatory developments to tackle
greenwashing are also covered, alongside guidance provided to support financial institutions in minimising
the risk of greenwashing allegations.
The finance sector, as the gatekeeper of capital, not only has a significant responsibility in this global climate
crisis, but stands in a unique position to drive truly ‘green’ markets. By unpacking the “green sheen” andexplaining what is required to make and support green claims, this guide aims to assist the financial industry
in achieving those ends.

A DEFINITION
There is no settled definition of greenwashing. Nevertheless, in the context of the finance industry, greenwashing
generally refers to the false, deceptive, or misleading statement / representation of the nature and extent towhich a financial product, investment strategy, or company has a positive environmental or climate impact.1 It
occurs where a company suggests that that they have a net positive or net neutral impact on the environment,in circumstances where their business model or activities or products may actually cause environmental
harm. It is also now more widely accepted that greenwashing does not require intentionality, i.e., greenwashing
may be deemed to be committed regardless of whether the entity engaged in greenwashing intended todeliberately mislead.2 The range of enforcement actions reviewed would suggest that an assessment is usually
made considering the overall circumstances with a focus on how the representation / statement is perceived.
While the term greenwashing is sometimes applied to include misleading conduct in relation to social or
governance matters, its classic context is within environmental claims. This guide is limited to greenwashingin the specific context of environment-related matters.

THE PROBLEM WITH GREENWASHING
Across geographies, greenwashing claims have been seen through various sectors, including in the retail sector,3utilities sector,4 automotive sector,5 aviation sector,6 and the fossil fuel sector.7 Indeed, studies have found thatup to 40% of green claims made globally are misleading.8
One of the areas of greenwashing that most elicits concern is that within the financial sector. In the context ofincreasing attention in tackling climate change and the international goals to transition to net zero, greenwashingin the financial markets is a major problem because it:3

a. misallocates
capital,therebyendangering the green economictransition and the global commitment
to the Paris Agreement temperature
goals;
b. makes it challenging for the market tomake fair and accurate comparisons
between companies and track acompany’s progress against its
commitments;9c. can result in an uneven playing field
between companies engaging ingreenwashing and those who havegenuinely “greened” operations (andincurred the associated costs of thatgreening); andd. reduces investor confidence in green
products, inhibiting consumer uptakeof green products.

$7.50

CORRELATION BETWEEN GROWTH OF
GREEN ECONOMY WITH GREENWASHING CASES

$6.50
$5.50
$4.50
$3.50
$2.50
$1.50

2016

2017

2018

2019

2020

2021

16
14
12
10
8
6
4
2
0

Green economy according to market capitalisation (US$trn)
Number of climate-washing cases per year in the world(judicial and non-judicial)

Fig. 1. A graph demonstrating the size of the global green economy(Source: FTSE Russell) growing alongside the number of climatewashing cases between 2016-2021 (Source: Climate Social
Science Network). These do not reflect figures for 2022 and 2023
which, from a review of the overall literature, suggests a continuationof this upward trend.

TRACKING THE RISE
There are several reasons why greenwashing within the financial sector is on the rise. One reason is the green
finance opportunity, valued by one account at $5 trillion across all sectors in Asia by 2030.10 Green investment
products are appearing across asset classes and geographies, capitalising on the consumer interest in the “E”
of ESG investing.11 Companies are increasingly marketing or labelling themselves or their products as “green”,
or attributing environmental benefits to them.12 Examples of these products include green managed funds,
green listed equities funds, green infrastructure funds, green private equity investments, sustainability-linked
bonds, and green bonds.

GREEN MARKETOPPORTUNITY

Investee /real economy
compaines

Greenwashed claims
and information canpass through into
financial products if
asset managers do not
exercise adequate
scrutiny / stewardship

PUSH FORNET ZERO

Financial institutions

Green financial products
on primary andseconday markets

Investors
Another round of greenwashing
may occur in the products
themselves before reachinginvestors

Fig 2. In the investment chain, there are two stages of greenwashing – those that are generated from the claims andinformation by the investee companies themselves, and those that arise from the financial institutions.
4Second, in response to both the climate emergency and increasing investor demand, many financial institutions
have made net zero commitments or stated they will align their emissions with the Paris Agreement temperature
goals. There has been a significant number of net zero initiatives: Net Zero Asset Manager initiative,13 Net
Zero Asset Owner Alliance,14 Paris Aligned Asset Owners,15 Net Zero Banking Alliance,16 and Net Zero Financial
Service Providers Alliance.17 These net zero initiatives have achieved strong uptake in their membership byfinancial institutions, including those headquartered in Asia. The challenge for these financial institutions is toachieve these net zero commitments across their complex organisations and value chains, in the timeframes
demanded by the best available science on the climate crisis. These challenges are compounded by a lack ofclarity regarding how labels and commitments are to be translated into practice in this emerging landscape,creating an environment where the risks of greenwashing are substantial. Net zero initiatives are also having tonavigate and assess whether their signatories’ commitments are credible, to ensure they are not using these
networks to greenwash their credentials.

HEIGHTENED SCRUTINYRegulators around the world are taking notice. For example, theUnited Kingdom’s (UK’s) Financial Conduct Authority, as partof its 2022 strategic plan states: “We will identify where firm
practices do not meet our expectations (e.g. greenwashing) andintervene swiftly to protect consumers.”18
In Asia, the scrutiny of greenwashing is now also accelerating.
Greenwashing is being flagged by regulators around theregion as a serious issue. Hong Kong’s Monetary Authority’s
research has found that “greenwashing is not uncommon in
the global green bond market, as about one-third of corporate
green bond issuers are found to have a poorer environmental
performance after their initial green bond issuance.”19 Likewise,
Japan’s commissioner of the Financial Services Agency20 has
announced increased scrutiny of green claims to protect
investors from greenwashing. Yi Gang, Governor of the People’s
Bank of China is reported to have identified greenwashing as a“moral hazard” and explained that supervision must be strict.21

5The estimated green investment neededin ASEAN alone is US$200B per year till
2030… The stakes are high, making it
critical for the market to have accurate
climate information to drive decision
making. The biggest threat to this rightnow is greenwashing.
Tan Boon Gin

CEO of SGX RegCo

C. EVOLVING REGULATION AND GUIDANCE
One
importantwaytoaddress
greenwashing is providing clear andenforceable standards and to encourageorganisations
toimplement
themcomprehensively. As such, a raft of
new standards to identify and prevent
greenwashing are being introduced at
the international, regional, and domestic
levels. So far, these have fallen into fivemain categories (as seen in Fig 3).
These allow analysts and investors tocompare climate credentials of different
investments. Additionally, they increase
the market’s confidence in companies’
green claims and credentials, thereby
freeing up capital for investment in thegreen economic transition.

Disclosureand reporting

Net zero
integrity

International

Greenwashingregulations
and guidanceGreen rating
criteria

Climatetaxonomy

Product andfund labelling

Regional

Domestic

Fig 3. The five main forms of greenwashing-related regulation andguidance are found at the international, regional, and national levels.

INTERNATIONAL DEVELOPMENTS
Before turning to the five categories of greenwashing regulation and guidance, we turn to the internationallypromulgated standards which have played a role in setting the landscape. Recognising that greenwashing “hasthe potential to severely undermine investor confidence in sustainable finance and threaten efforts to combat
climate change”, the International Organisation of Securities Commissions (IOSCO) has issued a call to action
to financial markets’ voluntary standard setting bodies and industry associations to adhere to IOSCO’s Good
Sustainable Finance Practices.22 In doing so, they promote good practices among asset managers and ESG
ratings and data providers to counter the risk of greenwashing.
Key international standards and guidance for climate disclosure reporting include the Taskforce on ClimateRelated Financial Disclosure (TCFD),23 Science Based Targets Initiative (SBTi)’s Financial Sector and TCFD
Reporting Guidance,24 Sustainability Accounting Standards Board’s Climate Risk Technical Bulletin.25
In addition, the new International Sustainability Standards Board standard has recently been announced(with expected issuance at the end of Q2 2023),26 which aims to create a global baseline of sustainability andclimate related disclosure requirements for the capital markets. This new standard signals a significant shift
in the market, delivering high quality, globally comparable sustainability information for the capital markets,
informing companies about what and how they need to disclose.27
In parallel with mounting disclosure expectations and obligations, businesses and financial institutions are
increasingly expected to make and improve the credibility of their net zero commitments. The UN Highlevel Expert Group on the Net Zero Emissions Commitments of Non-State Entities has established leading
recommendations in its report, ‘Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions,
Cities and Regions’ (UN Net Zero Report).28

6

CLIMATE DISCLOSURE STANDARDS
Effective disclosure is key to a green transition and the prevention of greenwashing. In most jurisdictions
reporting against climate disclosure standards is voluntary, but mandatory standards are being introduced.
These include the European Commission’s disclosure requirements under the Sustainable Finance Disclosure
Regulation (SFDR)29 and Corporate Sustainability Reporting Directive (CSRD).30 More will likely follow from theEuropean Supervisory Authorities’ recent consultation on greenwashing,31 and the US’s proposals for publiccompanies to disclose their direct greenhouse gas emissions and have them verified by a third party, as well
as for funds with ESG labels.32 In Australia, a consultation is currently underway on mandatory disclosure ofclimate-related financial risks, which is proposed to come into force in the 2024/2025 financial year.33
Guidelines are also being introduced to inform financial institutions of what regulators expect in relation
to the management and/or disclosure of climate risks in ESG investments. In Asia, some of the key
guidelines include:

China’s central bank has issued
guidelinesonenvironmental
information disclosure for financial
institutions34 and its Ministry of
Ecology and Environment has
issued rules requiring certain highemissions companies and listedcompanies that have violated
environmental laws in the previous
year to provide specific disclosuresof environmental information andcarbon emissions.35

Hong Kong’s Securities andFuturesCommission(SFC)
has updated its circular on therequirements for ESG Funds todisclose
information
relating
to their investment objective
and investment strategy, and arevision of the SFC Fund Manager
Code of Conduct to require themanagement,
anddisclosureof climate related risks by fundmanagers.36

India has reporting standards
requiring emissions data fromcertain listed entities.37 The
Securities and Exchange Boardof India has further released a
consultation paper on a proposal
to regulate ESG funds’ portfolioand stewardship activities.38

in Japan, the Financial Services
Agency (FSA) has also updated
its Stewardship Code, settingout its expectations for financial
institutions to disclose their voting
records.39 It also has a proposed
law that listed companies willneed to provide annual publicsustainability disclosures, whichis expected to come into force in
2023.40

Singapore has issued Guidelines on
Environmental Risk Management
to financial institutions andhas also published information
papers on the environmental risk
management practises of banks,
insurers and asset managers which
identify good risk management
practices by financial institutions
and highlight where further work isneeded.41

Thailand has released guidelinesonthemanagement
anddisclosure of climate-rated risks
for asset managers.42

in the Philippines, a guideline
has been issued on banks’sustainable investments and their
management of risks associatedwith green financing.43
7

The response from industry to increased disclosure obligations has been mixed. While many in industry callfor more guidance from regulators, others are concerned about increased legal risk relating to forward looking
statements, and more regulatory complexity in navigating different rules in different jurisdictions. There isalso a desire for more guidance from regulators and training for not only financial institutions and otherproduct issuers, but also investors, so that they understand new taxonomies and can identify their investment
preferences and distinguish between different product categories.44

LABELLING STANDARDSThere are a growing number of rules and guidelines relating to product and fund labelling. These assist
consumers in comparing financial products and reduce greenwashing. Such rules and guidelines include theproposed European Securities and Markets Authority (ESMA) rules for ESG fund labels,45 the UK’s Financial
Conduct Authority’s proposed restrictions on the use of terms “green” and “ESG” and “sustainable”,46 theAustralian Securities and Investment Commission’s (ASIC) list of ‘don’ts’ for issuers to consider when preparing
communications about sustainability-related products.47
In Asia, notable developments include:in China, the China National
Intellectual Property Administration(CNIPA) is reportedly refusing toregister trademarks including theword “green”.48

Japan’s FSA has announced
new guidelines for funds whichhave ESG factors in their names
andinvestment
strategies,49in response to concerns overgreenwashing of these investment
products. In Japan only funds thatconsider ESG a “key factor” will beable to label their product as such.50

the Monetary Authority ofSingapore has issued Disclosure
and Reporting Guidelines for Retail
ESG Funds.51

STANDARDS ON GREEN RATINGS AND CRITERIA
Rules are being created to harmonise or guide comparisons between companies’ performance on ESG factors.
This is critical because many participants in the markets rely upon third party ratings agencies and certifiers
to evaluate companies’ and products’ green credentials, given the complexity of such analysis. For example:

the Securities and Exchange
Board of India has approved
new rules for rating a company
on environmental, social andgovernance issues, to aid investors
comparing the green credentials
of different companies.52

Japan’s FSA has also issued avoluntary Code of Conduct for ESG
Evaluation and Data Providers.53

in South Korea, the Financial
Supervisory Service has issued
new guidelines to enhancetransparency on credit rating
agencies’ certification of ESG
bonds.54

8

GREEN TAXONOMIES
Efforts are being made to create green or climate taxonomies. The aim is to establish a common language andclear definition of what is sustainable by means of a classification system for sustainable economic activities,
in order to more clearly direct capital to sustainable projects. The global frontrunner on this front is the EU’s
Taxonomy for Sustainable Activities.55
In Asia some notable domestic developments on green taxonomies include the following:

Indonesia has released ataxonomy to support businesses
indescribing
their
green
activities.56

Japan reportedly does not intend
to introduce a green taxonomy– its basis appears to be thathaving one would be restrictive incircumstances where ESG issues
are evolving as are the views on
the role of natural gas and nuclear
energy.57

Malaysia has issued its Climate
ChangeandPrinciple-based
58
Taxonomy(climate focusedsustainability taxonomy for thefinancial sector) and its Securities
Commission has released its
Principles-Based Sustainable andResponsible Investment Taxonomy
for the Malaysian Capital Markets,
which aims to guide classificationof economic activities that qualify
as sustainable investments.59

Singapore’s
Green
FinanceIndustry Taskforce is developing
a taxonomy to identify activities
that can be characterised as
green or transitioning towards
green, to tackle greenwashingin sustainable finance and guide
financial institutions.60

the Bank of Thailand andThailand’s Securities and Exchange
Commission have released a draft
sustainable finance taxonomy.61

in Vietnam there is a draft
decision on green projectclassification (though this is still indevelopment).62

Given the number of these taxonomies being created at a national level, there is some attempt to create uniform
taxonomies across jurisdictions. The ASEAN taxonomy for sustainable finance aims to be the reference point
for classification of sustainable projects and activities in ASEAN.63 It is an initiative focusing on environmental
objectives, which is currently in development with its second version released in 2023. In addition, China andthe EU are developing a Common Group Taxonomy on Climate Change Mitigation.64 There are also specificinitiatives such as the Climate Bonds Initiative’s Climate Bonds Taxonomy.65
The challenge for organisations in navigating this rapidly evolving patchwork of voluntary and compulsory
standards and guidelines relating to green claims, green products and green investments is significant, as is
the task for regulators attempting to encourage and enforce compliance.

9

NET ZERO INTEGRITY
Recognising the urgency of addressing climate change, net
zero commitments have been made by a large number oforganisations globally. As at the end of 2022, according to one
analysis, 73% of the world’s largest financial institutions had
made a net zero commitment.66 Of these, as high as 65% have
set interim targets identifying specific decarbonisation goals tobe met prior to 2050.67 While this is positive progress, there iscontinuing concern about the credibility of these commitments.
According to the World Benchmarking Alliance, only 2% of
leading financial institutions have applied interim targets acrossthe institution’s financing activities.68

We urgently need every business,investor, city, state and region to walkthe talk on their net zero promises. We
cannot afford slow movers, fake movers
or any form of greenwashing.
António Guterres

UN Secretary General

Guidance is beginning to emerge to address these issues. The most significant development to date is the
UN Net Zero Report,69 establishing leading recommendations in respect of net zero commitments for nonstate actors.
The UN Net Zero Report recommends that entities making net zero commitments should:
a. not build, invest, lend or underwrite any new fossil fuel supply;
b. not be involved in, invest in or lend to any companies involved in deforestation or other environmentally
destructive activities;c. immediately cut the company’s own emissions across the value chain. This should include both absoluteemissions reductions, as well as emissions intensity reductions, and should address emissions across theirfull value chain (scopes 1, 2 and 3);
d. have a comprehensive and transparent net zero transition plan, which is based in science and verified
by third parties, with interim targets (for 2025, 2030 and 2035), and demonstrating how all parts of thebusiness align with those interim targets and long term net zero targets;e. report transparently and regularly on plans and progress to net zero by 2050;
f. for interim emissions reductions required by its net zero transition plan, not rely on voluntary carbon credits;
g. high integrity carbon credits should be used for beyond value chain mitigation;70h. invest in a just transition, by participating in developing country-led initiatives to decarbonise and provide
renewable energy access;i. align policy, engagement and lobbying efforts, including memberships in trade associations, with the goal of
reducing global emissions by at least 50% by 2030 and net zero by 2050; andj. align stewardship activities (including proxy strategies) with decarbonisation policies.
Full details on the best practice for net zero commitments are found in the UN Net Zero Report itself. Other
useful guidelines for net zero integrity include the Science Based Target’s Initiative’s Corporate Net Zero
Standard and its forthcoming standard for net-zero targets for the financial sector, as well as ISO’s Net Zero
Guidelines and the Investor Agenda’s Investor Climate Action Plans, among others.71

10

D. ENFORCEMENT ACTION AGAINST GREENWASHING
Addressing the problem of greenwashing relies extensively on adequate enforcement measures. Regulators
are therefore increasingly focusing on enforcement of and compliance with standards and other legal
prohibitions against greenwashing.
Recent regulatory moves globally include the Securities and Exchange Commission in the United States
setting up a Climate and ESG Task Force Enforcement Division, and the Australian Securities and Investments
Commission issuing numerous fines for companies’ greenwashing – it most recently stated that it would “upthe ante” in 2023 and move from fines to court litigation, including in relation to superannuation funds andretail investment funds. Notably, regulators are now regularly cooperating across jurisdictions on enforcement
actions against global entities.72
Regulators in Asia are at a more nascent phase in enforcement action against greenwashing. To date, there havebeen no reported fines by regulators in the region. Yet, there are signs that regulators across Asia may soon
ramp up their activities. The South Korean Ministry of Environment has reportedly launched a greenwashinginvestigation into domestic oil and steel companies SK Energy, SK Lubricants and POSCO,73 following claimsof greenwashing by a civil society organisation. It has additionally issued a draft law introducing fines forcompanies that mislead the public about their environmental impact.74 Hong Kong’s Securities and Futures
Commission issued its Agenda for Green and Sustainable Finance, announcing that “there is a clear consensus
that regulators should ensure green finance initiatives are properly regulated and market integrity and investor
protection are maintained.”75
The number of greenwashing claims in courts across the globe is rising exponentially. To date, claims against
corporations for greenwashing have largely been initiated by non-governmental organisations (civil society),11concerned citizens, or with the help of whistle-blowers. Rulings against corporations have mainly come fromadvertising standards bodies, as well as from financial sector and competition and consumer regulators. Thatsaid, enforcement by environmental regulators is also on the rise.76 While complaints / notices lodged byconcerned citizens and non-governmental organisations continue to grow, competitors have also been seen
to seek enforcement against greenwashing companies. Where a company’s greenwashing can be identified
to have caused economic loss to third parties, claims, and in particular class actions by shareholders andconsumers, may also arise. As more climate reporting regimes become compulsory, central banks and otherauthorities administering these reporting requirements will also be expected to pursue enforcement action.

CLASSIFYING FORMS OF GREENWASHING AND ENFORCEMENT ACTION
The growing multitude of greenwashing claims in the financial sector, together with the enforcement action
these attract, can make for a dense and confusing landscape. The typology in the table below (i.e., Table1) assists in navigating this landscape. It classifies greenwashing into various categories, together withcorresponding examples (in the public domain) of claims in relation to those categories where possible. Where
certain types of activity could conceivably be regarded as greenwashing, hypothetical examples to illustrate
the legal risk are provided.77
While many of the examples of existing greenwashing claims are in jurisdictions outside Asia, there are somenotable examples which demonstrate certain jurisdictions in Asia already being active in identifying andseeking to prosecute greenwashing.78 As noted by the Asian Development Bank, climate change litigation is
not a distant risk but a current reality in Asia.79 The greenwashing investigations that are currently active in
Asia do not for the most part include court actions. It may be that the approach in Asia has tended towards
notifying alleged greenwashing actions to regulators, rather than directly initiating court claims. Either way,pressure on companies accused of greenwashing in Asia is expected to intensify, both from civil society
and regulators.

12

TABLE 1. TYPOLOGY OF GREENWASHING CASES WORLDWIDE
Types of greenwashing conduct

Illustrative examples

I. BRAND GREENWASHING:
Greenwashing of the organisation in overall terms,
e.g. profile, activities, and ambitions•

a. Brand / reputational greenwashing: claiming thecompany’s business model is more environmentally
sustainable than it actually is
b. Net Zero / ESG claim greenwashing: company issuing
unsubstantiated statements or claims, or action plans
which do not meet emission target goals or align withgreen statements or with no credible implementation
plans

•

II. PRODUCT GREENWASHING:
Mislabelling / mis-selling products as green orwith vague green claims when the product is only
partially green or the green attributes are not asignificant aspect of the overall environmental
impact of the product, or there is a gap between thegreen product label / concept and implementationof its strategy

•

•
•
•

•
•
•

•
•

HSBC, a bank, was found by the UK’s Advertising Standards Authority to be misleading in relation toits green advertisements because it omitted information about its financing of high greenhouse gas
emissions companies, leading to the mistaken understanding that HSBC was making a positive overall
environmental contribution80
Enviva, a producer of wood pellets, was sued by shareholders via a class action relating to its allegedfalse statements regarding its environmental sustainability in its business, operations and compliancepolicies81
Santos, a gas producer, is being sued by civil society organisation for its company-wide net zero
emissions by 2040 and “clean energy” claims, which are alleged to be based on unproven carbon
capture and storage technology82
TotalEnergies has been sued by civil society over its net zero marketing campaign83
Royal Bank of Canada is being investigated by Canada’s Competition Bureau for charges of misleading
advertising, with its marketing material allegedly suggesting it was aligned with the Paris Agreement
and that it aimed to achieve net-zero emissions by 205084

South Korea’s SK E&S gas company was brought before the Korea Fair Trade Commission by a civilsociety organisation in relation to its description of a new “CO2-Free” gas development.85 In responseto the claim, SK E&S has modified its language to now claim the development is “low carbon”86
South Korea’s SK Lubricants has been notified to regulators for its claims to sell carbon neutral engine
lubricants.87 It is reported that the South Korean Ministry of Environment has launched a greenwashinginvestigation into SK Lubricants as well as SK Energy and POSCO88
BNY Mellon paid a $1.5 million penalty due to the SEC’s investigation for alleged misstatements about
ESG attributes of mutual funds it managed89
Goldman Sachs Asset Management (GSAM) was investigated by the SEC for green claims maderelating to its ESG funds in circumstances where there were no written policies or procedures for ESG
research for a period, and once they were in place they were not consistently followed. GSAM was fined$4million90
DWS, German asset manager and part of Deutsche Bank Group, was investigated by the SEC, theBaFin and the Frankfurt prosecutor for allegedly misrepresenting some of its ESG activities. All three
investigations are still ongoing91
Superannuation trustee fined by ASIC92 for misleading consumers regarding the extent of negative
investment screens of companies in carbon intensive industries93
13

Types of greenwashing conduct

•

•
•
•
•
•

III. GREENWASHED FINANCING:
Financial institutions providing green finance or
finance for green objectives (whether by way ofdebt, equity, bonds etc) in assets (e.g. corporations,financial products, projects etc) that are themselves
greenwashed
a. lenders provide “green” financing for projects that are“non-green” or which are used for non-green purposesb. lenders provide corporate financing for high emissions
companies for their “green energy transition”, whenthat company is still expanding fossil fuel production
c. financial institutions finance sustainability-linked
bonds, transition bonds or green bonds and suchbonds are used for sustainable / transition / green andnon-sustainable / non-transition / non-green purposes

•
•
•
•

Illustrative examples

Global Forestry Investment directors convicted of fraud following an investigation by the UK’s Serious
Fraud Office, in relation to allegedly green forestry investment funds in Brazil. Authorities in the UK
and Brazil co-operated in the investigation, which resulted in the directors being jailed for fraud for
11 years94
Italian textile manufacturer won an injunction against a competitor company Miko S.r.l. requiring Miko
S.r.l. to stop promoting environmental benefits of its products derived from petroleum95
Tlou Energy, an energy company, was fined by ASIC for false and misleading sustainability statements
for its misleading claims relating to its development of a “low emissions” gas project and “carbon
neutral” electricity96
Black Mountain Energy Limited, a listed energy company, was fined by ASIC for claiming that it was
creating a natural gas development project with ”net-zero carbon emissions”, which was alleged by theregulator as not having a reasonable basis or being factually incorrect97
Mercer Superannuation (Australia) Limited, the trustee of the Mercer Super Trust (a pension fund), hasbeen sued by ASIC in respect of alleged greenwashing claims which appeared on its website98
Whistle-blower complaint against JBS, the world’s largest meat processor, to the SEC regarding
alleged misleading and fraudulent “green bonds” it issued which were based on its commitment toachieve net zero by 2040. The complaint was that its emissions in fact increased, and its omission of
key information regarding actual number of animals slaughtered per year99

BNP Paribas (similar to other non-financial sector leaders in France) is being sued by civil society
organisations in France based on the French Duty of Care law101
Commonwealth Bank of Australia is involved in a legal claim with a shareholder seeking to investigate
its financing of fossil fuel projects and its alleged non-compliance with its own ESG framework102
JERA Co. Inc, a Japanese power generator, has been notified to the Singapore Exchange in relation to
its alleged failure to fully disclose risks relating to its $300 million bond issue103
Class action filed against the Australian government for not disclosing the risks of climate change
to sovereign bond investors.104 While this claim is not in respect of a green product (the bonds aresovereign bonds, not green bonds), it provides an example of the claims that may also be brought
against issuers in the future

14

Types of greenwashing conduct

Illustrative examples

d. asset managers invest in underlying companies /
assets that are greenwashede. banks provide “transition finance” for a highemissions company to reduce its emissions, butwith an emissions path which is not Paris-aligned orconsistent with International Energy Agency’s net zero
pathways that limit global warming to 1.5°C with no /limited overshoot100

Hypothetical scenarios that could be characterised as greenwashing include:

IV. FINANCIAL REPORTING GREENWASHING:
Financial institutions making false statements
or omissions pursuant to disclosure-based
regimes, or failures to make adequate financial
disclosures of relevant environmental risks of its
business, financing, or investments and thereby
underrepresenting its exposure to such risks

•

•
•
•

•
•

Sustainability-linked bond issued by reference to sustainability targets that are irrelevant, or too low tohave any meaningful climate impact, or which have already been achieved
Describing corporate financing for a fossil fuel company as “green finance” when the fossil fuel company
plans to undertake a renewables development, but is also expanding its fossil fuel business
Issuing a green or sustainability-linked bond to finance infrastructure for high emissions industry(e.g. cement, aviation, fossil fuels), that is constructed with green building certification and/or will use
renewable energy, or to finance projects to burn fossil fuels more effectively, e.g. ‘clean coal’ projects105

Shareholders of the Commonwealth Bank of Australia sued the bank for the issuance of its 2016 annual
report, in that it failed to disclose climate change related business / investment risks106
A civil society organisation has reported TotalEnergies to the French market regulator for allegedly
underreporting its carbon emissions based on Total’s own disclosures as compared to emissions
standards used by the French state environmental agency107
Complaint against Just Eat to UK’s Financial Conduct Authority regarding its annual report potentiallymisleading investors and exposing them to the risk of greenwashing by being led to believe its business/ product is “sustainable” without disclosing a Paris-aligned strategy or aligning with emissions
reduction commitments in countries where it operates108

Hypothetical scenarios that could arise with more mandatory disclosure regimes include:••

claim against a Financial Institution’s reporting of its scope 1, 2, or 3 emissions being incorrect orincomplete or without disclosing relevant assumptions
claim by purchaser of a company in a mergers and acquisitions context, where the purchaser relied on
climate reporting in the public domain or in due diligence that was misleading or incomplete. Claim forlosses based on reliance on climate representations or warranties, including claims that the purchaser
would not have purchased the company absent the false or misleading climate disclosure

15

LEGAL GROUNDS FOR CLAIMS AGAINST COMPANIES FOR GREENWASHING
Typically claims against companies for greenwashing arise out of existing laws and regulations in eachjurisdiction, not due to specific climate laws.
These claims have a variety of legal foundations, and include the below:

Law ofmisrepresentation /negligent
misstatement
Advertisingcodes

Marketdisclosure
regulation

Consumerprotection law

Shareholder
actionCompetitionlaw

Breach ofcontractual
provisions

Most of the above legal avenues for greenwashing claims have real world examples, demonstrating the wide
range of legal bases that can be used to found allegations of greenwashing.109
In addition, there are increasing concerns about the legal risk of actions being taken against fiduciaries fortheir failure to manage and disclose climate risk (which may be inconsistent with their company’s publicly
stated climate commitments). These include claims for breaches of fiduciary duties by trustees for failure toact in the best interests of fiduciaries by omitting to disclose or manage climate risks;110 and directors’ duties
breach claims against directors for their failure to fulfil their duty of care and diligence to the company relating
to their management of the company’s climate risks.111 Also, where a company is in breach of disclosure rules,
this could be the basis for a claim against directors for their failure to exercise due care and diligence. An
example of a recent case against directors for failure to adequately manage climate-related risk is that against
Shell’s board of directors in the UK for alleged breach of their duties under the UK’s Companies Act.112

16

CONSEQUENCES OF GREENWASHINGGREENWASHING OF
TRANSITION FINANCE
Greenwashing of transition finance, or“transition-washing”, is of particularcomplexity. The risk lies in suchfinance being misaligned with credible
decarbonisation
objectives:
one
example is where finance is obtained topurchase a low emissions technology,
butthecompany’s
emissions
reduction plan is not implemented ona trajectory that is sufficiently rapid,
or adopted across sufficient productlines, to align with the Paris Agreement
temperature
goals.
Alternatively,
it may be greenwashing to label it
as transition finance where a highemissions company plans to expand
its core emissions intensive business
operations and only reduce emissions
based on unproven / overly optimistic
assumptions of technology.
Transition finance plays an importantrole in transitioning emissions intensive
operations into low emissions ones.
However, with finite capital available tofund the green transition, investors must
be provided with sufficient information
to understand the environmental impact
of such transition finance. Accordingly,
investors and the companies inwhich they invest must take care in
identifying the purposes for which suchfinance is provided, and the conditions
attached
toensuremeaningfuldecarbonisationisachieved
inreal terms.

17

As noted above, greenwashing not only distorts the financial
markets and undermines the allocation of capital to the green
transition, but it also has direct impacts on the companies
involved.
The direct consequences of greenwashing to the companies
involved in greenwashing or associated with those companies
are varied, and differ across jurisdictions. They include:
a. reputational damage and backlash against social license tooperate or grow;113b. orders to remove advertising / labelling of products / funds;114c. fines and other sanctions imposed by regulators;115 andd. damages if loss is caused to shareholders / customers /competitors / contractual counterparties.116
Specifically in relation to greenwashing in the context of financial
products, the consequences beyond the individual entities
involved are also immense. They potentially include:a. the repricing of the greenwashed financial product / company;b. reduced ability of the company engaging in greenwashing toaccess capital markets / reduced demand for the financial
product;c. the repricing of the financial product asset class;d. capital exodus from the financial product / category if large
scale greenwashing in the product category is identified;117e. negative impacts and reduced capital availability across othergreen asset classes (e.g. green bonds greenwashing activity
impacting green equities, green index funds, ESG funds);
f. negative impacts on the financial stability of and investor
confidence in green investment classes generally; andg. reduced global progress on tackling climate change.

THE NEXT FRONTIER OF GREENWASHING CLAIMS
Beyond the above categories of greenwashing cases, this
rapidly evolving area has seen emerging, even creative, forms ofgreenwashing which the regulatory regime will need to contend
with in the future. Our expectation is that the next frontierof actions against companies considered to be engaging ingreenwashing relevant to financial institutions may include:
a. “Greenwashing by association” – intermediaries or asset
managers who include companies in their green portfolios
based on the portfolio company’s greenwashing, and represent
their portfolios to be green, may be liable for misleading
green representations. Likewise, companies who have joined
net zero alliances but do not meet their commitments may begreenwashing by virtue of their association with the net zeroalliance. Similarly, companies who claim to be green, but arealso funding organisations which lobby against Paris-aligned
goals, may also be found to be greenwashing.
b. “Transition-washing” – institutions may be greenwashing if
they provide “transition finance” or “green finance” to highemissions intensity corporations when that finance is not
used for transition or green activities, or in circumstanceswhere the activities meet definitions of green or transition
in only certain jurisdictions, or where the company being
financed does not have a credible emissions reduction
pathway that is in line with Paris Agreement temperaturetargets / International Energy Agency’s net zero greenhousegas emissions modelled pathways that limit warming to
1.5°C. Transition bonds or other forms of finance that havenot clearly defined the use of proceeds or detailed how tomeasure, plan and implement the greenhouse gas emissions
reduction targets may be exposed to claims of greenwashingif the use of the finance is not considered to be sufficiently
transition-aligned.
c. “Greenwashing via offsets” – where a company markets afinancial product as green but relies wholly or in material parton the purchase of voluntary carbon credits to support thisclaim, i.e., the increasingly contested practice of ‘offsetting’.
Claims on this basis have already been brought in Sweden
against dairy company Arla, and in the Netherlands against
Dutch airways KLM, in relation to their use of carbon offsets
to describe their high emissions activities as carbon neutral
or carbon offset.118
d. “Greenwashing claims brought by competitors” – industry
policing competitors’ green claims. We expect to see
more claims by companies against their competitors forgreenwashing, like that brought in the Italian courts119 for one
company’s greenwashing of its products causing damage
to another company’s competitive green advantage.120
Competition law authorities are also expected to open up
more investigations into competition law infringements.

GREEN-HUSHING?
There is concern that increasing
regulation and allegations relating togreenwashing may lead to “greenhushing”, where companies underreport or do not disclose their green
credentials to avoid scrutiny or having
to properly substantiate them. Whilethese behaviours by companies are
possible, we expect that given theimmense green market opportunities,
companies are likely to continue
wanting to showcase their green
credentials. Apart from the suggestionthat green-hushing may itself be a formof greenwashing (and may ultimately
still be subject to legal sanction),companies are increasingly under
mandatory legal obligations to makeclimate disclosures (regardless ofwhether their product lines or services
are specifically focused on green
industries or investments). As such, it
could be less risky to make specific,
clear, and accurate disclosuresrelating to material climate risks andother information, including forward
looking climate risks than in omitting
such information entirely. In this way,
being transparent in identifying thelimitations and uncertainties of thedisclosures made would likely be abetter course than “green-hushing”.

18

E. GUARDING AGAINST GREENWASHING: THE FIVE PILLARSGreenwashing is an area of significant legal and commercial risk, not only for the Asian financial sector asa whole, but also for individual financial institutions and their officers. To mitigate this risk, we set out below
relevant points to consider to guard against greenwashing or being associated with greenwashing by
third parties.

SCREEN YOUR GREEN
Scrutinise the accuracy and credibility of any green statement.
1. Accuracy of claims: avoid vague terms and ensure your statements can be fully substantiated. Green
claims should be objective, accurate and have sufficient specificity regarding the objective of the product:a. Consider what different members of the audience for these claims might understand by them and makereasonable efforts to ensure that no one would be misled by them. For example, if it is a “fossil fuel free”
fund, consider if the fund is invested in companies that distribute fossil fuels or whose core business isservicing the fossil fuel industry.
b. If a financial product is stated to have an environmental impact, explain what that environmental impact
is,121 e.g. if the fund has a negative screen on fossil fuel companies or a specific sector focus, explain theenvironmental impact of that screen / sector choice. Explain the investor impact, which is the change thatthe investor creates (e.g., by allocating capital to the investee company and identifying which specificinvestee company initiatives are due to the investment capital).122 Explain also the investee company’s
impact in the real economy (e.g., investee company has increased capital to expand its technology to
reduce the emissions intensity of existing manufacturing processes).
c. Where repeating or adopting green representations by third parties (e.g., investee companies, banks’clients, or ESG data providers), ensure you have either scrutinised those representations to determinethat they are credible, or made clear that they are the third party’s representations, not your own. For
example, where an investment advisor is marketing a green financial product, they should make clearthat the green claim is the issuer’s claim, not the adviser’s own representation.
d. Ensure information is consistent across different channels, from product disclosure statements tosocial media. Resist any temptation to exaggerate green claims (even in less formal media channels andadvertising).
e. Consider warnings and disclaimers, making clear what the product or business does not do, if that would
ensure a reader would not be misled.
2. Past, present, and future statements:
a. Be mindful of past green claims and consider whether they are still accurate or need to be updated.
b. Claims about a present business model or product should be made only where they provide a real benefit,
not where they are insignificant or irrelevant. For example, if a sustainability-linked bond provides for theattainment of key objectives, the action needed to achieve those objectives should not be negligible,
irrelevant or already achieved. If highlighting your organisation’s green efforts, consider whether thismight be misleading considering the overall profile of your organisation’s business, for e.g., in continuing
to finance fossil fuels.
c. If making statements about the future, ensure you have a reasonable basis for making those statements(i.e. if you have a goal for emissions reductions, ensure that you have a reasonable basis for expecting toachieve those emissions reductions) and that you intend to pursue any announced plans to make goodon the statement.

19

3. Net Zero Commitments / membership of Net Zero Alliances:a. The UN Net Zero Report123 establishes leading recommendations for companies’ net zerocommitments.124 While its recommendations are not law, companies should familiarise themselves withthis report in order to manage their greenwashing risk. It is anticipated that many of the UN Net Zero
Report’s recommendations may be translated into regulatory requirements across jurisdictions.
b. In relation to net zero alliances, it is important to understand what commitments your organisation has
made in joining the alliance, and what action is required to meet them, including whether the alliancerequires the disclosing of targets and any consequences for failure to disclose such targets (for example,
the Net Zero Asset Managers alliance will delist members if they do not provide required disclosures oftargets125). In addition, if you have joined an alliance but have not developed a transition plan to achieve
net zero throughout your operations, consider whether you have a reasonable basis for your claim toachieve net zero, and whether this may give a misleading impression to the market.

IN GOOD AND GREEN FAITH
Be transparent about how the green objectives are integrated into the financial product and its
financial objective.
1. Clearly articulate investment methodologies: explain whether the green statement aligns with the coreapproach to managing the investment product. In the case of a managed fund,126 consider whether thegreen principles are integrated into the investment strategy (including whether the investment selection
within the fund is consistent with the green claim) and if the investment methodology is explained,
including any weighting between green principles and other relevant investment considerations. Are there
qualifications to this approach or materiality thresholds (and if so what are these thresholds)? Do thesequalifications make the overall product inconsistent with the green claims? Explain whether the approachis one of negative screening or impact.
2. Manage investee companies/ holdings in accordance with green claims: engage in adequate due
diligence prior to investment, demand transparency on the underlying holdings, insist upon emissions andother environmental impact data (including reporting of environmental incidents, progress against theirown green targets etc), and scrutinise the credibility of their net zero pathways (for example, against the
UN Net Zero Report standards), alleged climate impacts, the data relied upon, and assumptions made. Be
transparent about stewardship activities with investee companies and proxy voting. Be clear about yourorganisation’s expectations of “transition” activities, and engage with companies to ratchet up their net
zero ambitions and transition plans.
3. Manage green financing: ensure that any label being applied to a sustainable finance product, whether
green, sustainable, sustainability-linked or transition, is consistent with credible international guidelines,
for example those published by the International Capital Markets Association, or published taxonomies.
Consider ensuring that a high-quality third party opinion is obtained to verify the appropriateness of therelevant label.

20

sco Analysis.

4. Influence over the index: if the issuer has influence over the benchmark index against which its product’s
performance is measured, disclose the fact and nature of that influence. Absent this, an investor may
assume the issuer has no influence when it in fact does.
5. Data: identify data limitations and explain the consequences of those limitations to the product ororganisation’s green strategy. Explain / scrutinise data sources relied upon. Identify whether data is
incomplete or non-standard or limited in other respects, and what is being done to address these limitations.
Explain whether the data is third party audited and how often it is updated. Identify whether third party
ratings organisations are relied upon. Ensure your organisation has sufficient internal capacity to analysethat data.

INVESCO CASE STUDY: CREATING AN ESG INVESTING NOMENCLATURE
With investors having differing ESG objectives and approaches, Invesco has created an ESG investing
nomenclature to enable investors to express their values through a spectrum of approaches andrequirements in their investments. To create greater transparency for investors, Invesco’s ESG
nomenclature provides five different ESG strategies. This is set out in the infographic below:

ESG from every angle
Invesco provides a comprehensive range of
ESG-focused capabilities that enable clients toexpress their values through investing.
Invesco also integrates financially material
ESG considerations across its investment
platform, taking into account critical factors that
help it deliver strong outcomes to clients.

SUSTAINABLERESPONSIBLE

ESG INTEGRATION• Consideration of financiallymaterial ESG aspects• Sustainable value creation

SCREENED(EXCLUSIONARY)
Approach
Industry sectors or companies
excluded to avoid risk or betteralign.
Process• Safeguard (e.g. article 8
Exclusion framework) or
client-led exclusions

Approach
Intentionally avoid
companies orindustries based on ESG
characteristics.

Approach
Intentionally selectcompanies or industries basedon ESG characteristics andoptimize to target a declared
sustainable feature.

Process• ESG integration• Safeguards• Enhanced exclusions• (e.g. 0% conventional energy)• Positive allocation (e.g.
eliminate 30% lowest-scoredcompanies from the universe)

Process• ESG integration• Safeguards• Enhanced exclusions(optional)• Positive allocation (optional)• Best in class to achieve adeclared feature / KPI (e.g.
better ESG or carbon scorethan the benchmark,thematic approach)

ESG labelled

ESG labelled

IMPACT INVESTING
Approach
Includes objective to generate
an intentional, measurable,
and beneficial social orenvironmental impact.
It prioritises this above financial
objectives.
Process• May vary depending on theimpact focus

ESG labelled

INTEGRATED PROCESS

Source: Invesco Stewardship Report (2021 ESG Investment Stewardship Report)
1

Increased regulations to address greenwashing risks, such as ESG fund disclosures and requirements,
have helped create clarity in defining ESG investing. However, challenges remain in navigating regulatory
differences across regions.
One way Invesco navigates these different regulations is by having a proprietary internal framework that maps
the ESG investing approaches onto the different regulatory requirements across the global geographies.
For example, in accordance with the fund nomenclature, the ESG Integration and Screened (Exclusionary)
approaches would not be regarded as or capable of being labelled an ESG product under the HK SFC’s
or Singapore’s MAS ESG Fund Disclosure Circular / guidelines. However, the Responsible, Sustainable,
and Impact Investing approaches may be, if the strategy includes ESG factors as a key investment focus(negative screening alone would not be sufficient).
It is Invesco’s view that having a clear framework of ESG investing objectives alongside a standardised
nomenclature of ESG approaches aligned to varying regulations will help facilitate better understanding andclarity amongst investors when thinking about sustainable investing.
21

WALK YOUR GREEN TALK
Ensure the company or fund’s green image isconsistent with the internal actions of the company
or fund and their actions in relation to third parties.
1. Align labelling of the financial product with stewardship: tothe extent the financial product’s investment strategy includes
stewardship (including engagement with management and theuse of shareholder rights), this stewardship should be active
and aligned with the green statement / product label / net zerocommitment and there should be transparent reporting on
this stewardship and on proxy voting. Advocacy and lobbyingshould be consistent with the green claim.127 In the context
of a fund, explain whether stewardship activities are carriedout for all investments or only some, and if only some, why
in relation to those investments only. Explain the degreeof influence the fund’s stewardship has and report on theoutcome of those stewardship engagements.
2. Ensure the organisation acts in accordance with internal
green policies: for example, if the organisation has climate orother ESG policies, including any validly passed shareholder
resolutions related to climate commitments, ensure that they
are complied with across the organisation including acrossbusiness units and roles. This will often require systems andcontrols and board-level oversight to ensure compliance withsuch policies.
3. Third party verification: obtaining objective and robust
external assurance of climate reporting128 will provide
additional analysis to the company’s assessment and lend
credibility to the market.
4. Internal capability: consider whether additional internal
skill or capacity is required to address the green objectives
and reporting obligations. Ensure adequate training sothat marketing functions within the organisation or those
distributing the financial product understand the green
claims and investment strategies. While doing so, refrain fromexaggerating any green or sustainability credentials of staff.

ABRDN CASE STUDY:
ONE FINANCIAL
INSTITUTION’S APPROACH TO
TRAINING STAFF ON ESG RISKAt abrdn, there is a focus on training
to ensure the long-term success of its
sustainable investing approach. Thisis true particularly given increasing
regulatory expectations, including the
MAS Guidelines in Singapore, which
explicitly ask asset managers to equip
their staff with the adequate expertiseon environmental risk management.
To do so, abrdn launched a global
sustainable investing learning anddevelopment program. Accessible
to all staff across their Investments
Vector, it is tailored to the roles andresponsibilities of each team, withcompulsory
andrecommended
training sessions on a wide-range of
topics – from the fundamentals ofsustainable investing to regulations andproprietary tools and research. Within
this program, a particular emphasis isplaced on greenwashing, so that staff
understands what it means, its potential
implications and how to avoid it.
In parallel, abrdn recently hired a
dedicated ESG specialist in their
APAC Compliance team, to track ESG
regulatory developments across theregion, advise on regulatory compliancematters, conduct relevant training
and assist in developing internal
ESG-related compliance policies andprocedures, all of which contribute to
reducing risks of greenwashing.

22

OBSERVE THE CHANGING SHADES OF GREEN
Expectations and regulations are rapidly evolving, so monitor developments in all relevant
jurisdictions.
1. Monitor mandatory reporting obligations: know your climate / sustainability disclosure obligations –consider if you are operating in a jurisdiction where sustainability or climate disclosures are compulsory,or if they will soon be. If so, ask if you have the requisite data needed to comply. Additional questions
to ask to comply with potential obligations might include: are there any restrictions on the use of green
terminology where your product is offered? Are there requirements that must be met in order to certify
bond issuances as “green”, or finance as “transition finance”? As a rapidly evolving space which differs byjurisdiction, you should keep updated on developments in the jurisdictions you invest or offer products.
2. Monitor industry and stakeholder expectations (even where there is no mandatory reporting obligation)arising from net zero commitments/ alliances, market practice or soft law: understand your customers’,clients’, investors’ and other stakeholders’ green expectations and incorporate them into your approach toyour green products, financing activities, overall investment strategy and reporting. Inconsistent definitionsof well used terms such as ‘green’, ‘sustainable’, and ‘transition finance’ across jurisdictions means that
reliance is better placed on international standards linked to credible climate science rather than local
market practice when managing sustainability communications and marketing.

BE ALERT TO GREEN DUTIESKnow your legal and fiduciary duties to investors/ stakeholders.
1. Ensure directors and fiduciaries are acting in the best interests of the company/ their members bymanaging climate risk in their funds / companies / finance portfolios and making appropriate disclosures.
The precise nature of such legal and fiduciary duties will likely depend on the laws of the jurisdiction inquestion. Nevertheless, given the systemic risks climate change poses, this will often require monitoring andreporting on such risks regularly, including to the board, with internal audits of the assessment of these risks.
2. Consider whether governance strategies are effective to ensure ongoing compliance with green
investment strategies, financing policies, and other green commitments. In most instances, these shouldbe aligned with relevant science-based decarbonisation pathways – this may require such information or
expertise to be specifically resourced or externally provided. Consider if these responsibilities are owned
by senior leadership and overseen by the board, and even whether executive leadership’s KPIs should betied to green outcomes to align incentives with performance on green metrics.

23

F. CONCLUSION
Against the backdrop of the climate crisis and the accompanying push for a net zero economy, the cases ofgreenwashing are likely to grow – both in prevalence and variety. This has led to a smorgasbord of regulation andguidance meant to address this phenomenon, both within the Asian finance industry as well as internationally.
By sorting these regulatory developments into five main categories, this guide aims to provide clarity on how
greenwashing is currently being addressed by regulators and international bodies.
Additionally, the risk of legal claims being initiated against financial institutions in Asia by regulators, civil society
and private actors is significantly increasing. With an extensive review of the most significant enforcement
actions taking place against greenwashing, a typology of cases emerges that can be classified into (1) brandgreenwashing, (2) product greenwashing, (3) greenwashed financing, and (4) financial reporting greenwashing.
Financial institutions in Asia can learn from the lessons of the legal actions that are taking place across theglobe and that are now beginning to emerge in the Asian region. Horizon scanning of greenwashing cases at
the frontier also provides insight as to where legal and regulatory action may occur next.
With the above developments traversed, this guide provides some key recommendations for the Asian financeindustry on how to avoid greenwashing, or being associated with it. While not intending to be exhaustive or
conclusive, the five pillars can aid Asian financial institutions to consider how they might manage and mitigate
greenwashing risks within their own organisations and those they have dealings with, raising the bar of bestpractice for all those engaging in the green transition.

24

ENDNOTES
1

For further discussion of the definition of greenwashing, see for example Joint Response to
ESAs Call for Evidence on Better Understanding greenwashing, The Blended Capital Groupand others

35

2

See for example Frances Bowen, ‘Greenwashing’, p. 690 of Noel Castree, Mike Hulme andJames D. Proctor, Companion to Environmental Studies (Routledge 2018) and Unintentional
greenwashing: what it is & how to prevent it, although cf. Vera Ferron-Vilchez, Jesus
Valero-Gil, ‘How does greenwashing influence managers’ decision-making? An experimental
approach under stakeholder view’ (2020)

36

3

United States of America v. Walmart, Filed 4 August 2022; United States of America v.
Kohl’s Inc., Filed 4 August 2022

37

4

Washington Gas Accused of Misleading Consumers About Methane, Bloomberg, 4 August
2022

38

High Court denies Volkswagen leave to appeal $125 million penalty, ACCC, 12 November
2021

39

Environmentalists sue Dutch airline KLM for ‘greenwashing’, BBC, 6 July 2022

40

World-first Federal Court case over Santos’ ‘clean energy’ & net zero claims, Environmental
Defenders Office, 26 August 2021; Korean Oil Firm Faces Greenwashing Claims Over
Carbon-Offset Ads, Bloomberg, 27 October 2022

41

5

6
7

Global sweep finds 40% of firms’ green claims could be misleading, GOV.UK, 28 January2021; Screening of websites for ‘greenwashing’: half of green claims lack evidence,
European Commission, 28 January 2021; Gina Cass-Gottlieb’s speech at the Committee
for Economic Development of Australia (CEDA), 7 March 2023 on the ACCC ‘2023-24
Compliance and Enforcement Priorities’; Greenwashing by businesses in Australia, ACCC,
March 2023

8

For example, tracking progress against net zero commitments or Sustainable Development
Goals.

9

Asia’s $5 trillion green business opportunity, McKinsey See also Asia’s Net Zero Energy
Investment Potential, AIGCC

10

11

Pursuit of Ambitions: Net Zero Investment in Asia (3rd Edition), AIGCC, February 2022

Other potentially greenwashed terms include “sustainable”, “net zero”, “carbon neutral”,“climate positive”, “ESG focused”. Throughout this guidance note, however, we use theterminology of “green” to refer to all of these terms and their variations.

12

13

The Net Zero Asset Managers Initiative “291 signatories with USD 66 trillion in AUM”

14

Net-Zero Asset Owner Alliance

15

Paris Aligned Asset Owners

16

Net-Zero Banking Alliance17

Net Zero Financial Service Providers Alliance18

Business Plan 2022/23, FCA UK

Greenwashing in the Corporate Green Bond Markets, Hong Kong Monetary Authority
Research Memorandum 08/2022, 21 November 2022

19

Japan’s financial watchdog to step up scrutiny of ESG claims, says new chief, Reuters, 4August 2021
20

Yi Gang, governor of central bank: “Information disclosure is very important and is the
key to promoting green transformation. In order to implement green monetary policy tools
fairly and efficiently, it is necessary to prevent various moral hazard issues such as “green
washing”, low-cost capital arbitrage, and green project fraud in practice..” 27 June 2022

21

IOSCO Good Sustainable Finance Practices for Financial Markets Voluntary Standard
Setting Bodies and Industry Associations, 7 November 2022

22

23

Task Force on Climate-Related Financial Disclosures

24

SBTi Financial Sector and TCFD reporting guidance, January 2023

25

SASB Standards; Climate Risk Technical Bulletin, SASB Standards, 2022

ISSB ramps up activities to support global implementation ahead of issuing inauguralstandards end Q2 2023, IFRS, 17 February 2023

26

IFRS - ISSB delivers proposals that create comprehensive global baseline of sustainability
disclosures

27

Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities andRegions, United Nations High Level Expert Group on the Net Zero Emissions Commitments of
Non-State Entities, see page 37. See also, Investor Climate Action Plans, Investor Agenda;
The Corporate Net-Zero Standard, SBTi; Net-Zero for Financial Institutions, SBTi; Net Zero
Guidelines, ISO.

28

29

Sustainable Finance Disclosure Regulation30

Directives regards corporate sustainability reporting, EU, 16 December 2022

31

ESAs Call for evidence on better understanding greenwashing, EBA

SEC Proposes Rules to Enhance and Standardize Climate-Related Disclosures for
Investors, US SEC, 21 March 2022; SEC Proposes to Enhance Disclosures by Certain
Investment Advisers and Investment Companies About ESG Investment Practice, US SEC,
25 May 2022

32

Climate-related financial disclosure Consultation paper, Australian Treasury, December
2022

33

Guidelines on Environmental Information Disclosure for Financial Institutions, People’s
Bank of China, 22 July 2021; see endnote 21 above.

34

25

Measures for the Administration of Lawful Disclosure of Enterprise Environmental
Information, Ministry of Ecology and Environment of the People’s Republic of China,
December 2021
Circular to management companies of SFC-authorized unit trusts and mutual funds ESG funds, Securities & Futures Commission of Hong Kong, 29 June 2021; Consultation
Conclusions on the Management and Disclosure of Climate-related Risks by Fund Managers,
SFC Hong Kong, August 2021; Fund Manager Code of Conduct, SFC Hong Kong, August2022
Business responsibility and sustainability reporting by listed entities, Securities andExchange Board of India, 10 May 2021
Consultation Paper on ESG Disclosures, Ratings and Investing, Securities and Exchange
Board of India, 20 February 2023
Principles for Responsible Institutional Investors, Council of Experts on the StewardshipCode, 24 March 2020
Publication of Draft Amendments to the Cabinet Office Order on Disclosure of Corporate
Affairs, Financial Services Agency, November 2022
Regulatory and Supervisory Approach, Monetary Authority of Singapore

SEC launches Guidelines on Management and Disclosure of Climate-related Risk by AssetManagers, SEC Thailand, 10 January 2023

42

Guidelines on the Integration of Sustainability Principles in Investment Activities of Banks,
Bangko Sentral NG Pilipinas, 11 August 2022

43

44

See for example, ESA’s call for evidence on Greenwashing, ISDA, 10 January 2023

ESMA launches a consultation on guidelines for the use of ESG or sustainability-related
terms in funds’ names, ESMA, 18 October 2022

45

Sustainability Disclosure Requirements (SDR) and investment labels, FCA, 25 October
2022

46

How to avoid greenwashing when offering or promoting sustainability-related products,
ASIC

47

48

Green Trademarks in China are Getting Red Lights, Harris Bricken

Call for Public Comment on Proposed Partial Amendments to the Comprehensive
Supervisory Guidelines for Financial Instruments Business Operators, etc. regarding ESG
Investment Trusts, Financial Services Agency, 19 December 2022

49

Funds that Inflate Green Credentials face Strict New Rules in Japan, Bloomberg, 9February 2023

50

Disclosure and Reporting Guidelines for Retail ESG Funds, Monetary Authority ofSingapore, 28 July 2022

51

52
Consultation Paper on Regulatory Framework for ESG Rating Providers in Security Market,
Securities and Exchange Board of India, 22 February 2023; Press Release of Board Meeting
PR No.: 6/2023, Securities and Exchange Board of India, 29 March 2023

Finalisation of the Code of Conduct for ESG Evaluation and Data Providers, Financial
Services Agency, 15 December 2022

53

54
South Korea’s FSS introduces New ESG Rating Guidelines to Enhance Transparency,
Mayer Brown, 27 January 2023. In addition, there are various other initiatives to enhance
standardisation of green finance, such as the People’s Bank of China and other department’s
jointly issued “14th Five-Year Plan for the Development of Financial Standardisation”; China
issues 5-year plan for financial standardization, 9 February 2022; In addition, China has
issued a Green Bond Endorsed Projects Catalogue, 21 April 2021
55

EU Taxonomy for Sustainable Activities

Indonesia’s green taxonomy walks a tightrope in balancing industries of the past and thefuture, IEEFA, 11 May 2022; Indonesia Green Taxonomy Edition 1.0 – 2022, 20 January
2022

56

Funds that Inflate Green Credentials face Strict New Rules in Japan, Bloomberg, 9February 2023

57

58

Climate Change and Principle-based Taxonomy, Bank. Negara Malaysia, 30 April 2021

Principles-Based Sustainable and Responsible Investment Taxonomy for the Malaysian
Capital Market, Securities Commission Malaysia, 12 December 2022

59

Taxonomy, Monetary Authority of Singapore; Green Finance Industry Taskforce, Monetary
Authority of Singapore

60

61

Thailand Taxonomy, Bank of Thailand, 26 December 2022

Draft Decision of the Prime Minister on the promulgation of regulations on environmental
criteria and certification for projects that are granted green credits and issued green bonds,
Ministry of Natural Resources and Environment, 17 August 2022; see also Draft Decree
Implementing the Law on Environmental Protection, ACSV Legal, 9 November 2021.

62

63

ASEAN Taxonomy for Sustainable Finance, ASEAN Taxonomy Board

Common Ground Taxonomy – Climate Change Mitigation, International Platform for
Sustainable Finance, 3 June 2022; Comparison between the EU and China taxonomies

64

65

Climate Bonds Taxonomy | Climate Bonds Initiative

Navigating the Financial Industry’s Blurred Lines between Climate Commitments andGreenwash, RMI, 1 March 2023 - defines large financial institutions to be the top 100
largest institutions by assets.

66

Navigating the Financial Industry’s Blurred Lines between Climate Commitments andGreenwash, RMI, 1 March 2023. However, it is worth noting that studies of larger groupsof financial institutions show lower percentages of overall net zero commitments. For
example, a study of 400 financial institutions found that only 37% of its dataset offinancial institutions have disclosed long term net zero targets. See 2022 Financial System
Benchmark, World Benchmarking Alliance67682022 Financial System Benchmark, World Benchmarking AllianceIntegrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities andRegions, United Nations High Level Expert Group on the Net Zero Emissions Commitmentsof Non State Entities

69

Net Zero Asset Manager’s Initiative recommends that if using offsets, invest in long-term
carbon removal, and only where there are no technologically and/ or financially viable
alternatives to eliminate emissions, see Net Zero Asset Managers Commitment.

70

The Corporate Net-Zero Standard, SBTi; Net-Zero for Financial Institutions, SBTi; Investor
Climate Action Plans, Investor Agenda; Net Zero Guidelines, ISO

71

For example the US and German regulators are co-operating in the DWS investigation: See
Deutsche Bank’s DWS and allegations of greenwashing, Reuters, 9 June 2022

72

The Ministry of Environment investigates ‘eco-friendly false advertisement of oil refining
and steel companies, Infostock Daily, 7 November 2022

73

74

South Korea to penalise greenwashing, Solutions for our Climatem 17 February 2023

Agenda for Green and Sustainable Finance, Securities and Futures Commission, August
2022.

75

Chelsea Commodore v. H&M Hennes & Mauritz LP, filed 22 July 2022; Food, Beverage
Makers Rethink Marketing after Flood of ESH Suites, Bloomberg, 28 June 2022

76

This typology has been developed with the input of multiple stakeholders, including
AIGCC members, but is not intended to be definitive or cover the entire field. Rather, it
is intended as a tool for understanding the concept of greenwashing and the legal risks
in the current environment, and those we expect to see as the next phase of prosecutionof greenwashing ramps up. Many of the real-world examples included have occurred injurisdictions outside of Asia, given that prosecution of greenwashing in Asia only now
beginning.

77

For example, South Korean regulators are investigating cases. See South Korea to fine
firms for Greenwashing, Eco-business, 17 February 2023

78

Climate Change Litigation in the Pacific and Beyond, Asia Development Bank, December
2020

79

ASA’s ban on HSBC’s ‘greenwashing’ adverts indicative of increasing regulatory scrutiny,
Slaughter and May; see also HSBC faces greenwashing accusations from UK advertising
Watchdog, Financial Times
80

81

David Fagen v. Enviva Inc., John K Keppler and Shai S. Even, Filed 11 March 2022

World-first Federal Court case over Santos’ ‘clean energy’ & net zero claims, Environmental
Defenders Office, 26 August 2021

82

Environmental groups sue TotalEnergies over climate marketing claims, Reuters, 3 March
2022

83

Canada’s watchdog launches investigation into RBC over climate complaints, Reuters, 13
October 2022

84

S. Korean gas giant SK E&S sued in a landmark case over greenwashing, Solutions for our
Climate, 22 December 2022

85

SK E&S Writes New History in Resource Development, Opens low-carbon Liquefied NaturalGas (LNG) Era, SNE&S

86

Korean Oil Firm Faces Greenwashing Claims Over Carbon-Offset Ads, Bloomberg, 27
October 2022

87

The Ministry of Environment investigates ‘eco-friendly false advertisement of oil refining
and steel companies, Infostock Daily, 7 November 2022

100

French NGOs take BNP Paribas to court in world’s first climate lawsuit against acommercial bank, OXFAM, 23 February 2023
102

SEC Charges BNY Mellon Investment Adviser for Misstatements and Omissions
Concerning ESG Considerations, U.S. SEC, 23 May 2022
SEC Charges Goldman Sachs Asset Management for Failing to Follow its Policies andProcedures Involving ESG Investments, U.S. SEC, 22 November 2022

Japan power giant Jera faces SGX whistleblowing complaint, The Straits Times, 15
February 2023

104

Deutsche Bank’s DWS and allegations of greenwashing, Reuters, 9 June 2022; DWS is in
Deep Doo-Doo Over Greenwashing – Here’s Why, Morningstar, 6 June 2022

92

Australian Securities and Investments Commission, Australia’s securities regulator.

ASIC issues infringement notice against superannuation trustee for greenwashing, ASIC,
23 December 2022

93

First SFO trial of 2022 results in double conviction, Serious Fraud Office, 31 May 2022;
Global Forestry Investments, Serious Fraud Office94

95

Alcantara Wins Major Court Battle Against Greenwashing, Forbes, 8 December 2021

96

ASIC acts against greenwashing by energy company, ASIC, 27 October 202297

23-001MR ASIC issues infringement notices to energy company for greenwashing | ASIC

98

ASIC launches first Court proceedings alleging greenwashing, ASIC, 28 February 2023

O’Donnell v Commonwealth and Ors, Equity Generation Lawyers

Are Green Bonds as Good as They Sound? – Berkeley Economic Review; see also China tostop green bond financing for ‘clean coal’ projects, Financial Times

105

106
Abrahams v. Commonwealth Bank of Australia (2017) - Climate Change Litigation(climatecasechart.com)
107
Bilan carbone de TotalEnergies, Greenpeace; see also TotalEnergies challenged oncarbon emissions reporting, Financial Times
108

Just Eat Takeaway.com N.V., ClientEarth, 17 August 2021

For examples for common law misrepresentation see: World-first Federal Court caseover Santos’ ‘clean energy’ & net zero claims, Environmental Defenders Office. For civil
code claims of misrepresentation / failure to adhere to laws, see: Climate NGOs takeunprecedented legal action against number one European financier of fossil fuel expansion,
OXFAM, 26 October 2022. For consumer protection law claims, see: Environmentalgroups sue TotalEnergies over climate marketing claims, Reuters, 3 March 2022. For
anti-competition law breach claims, see: Alcantara Wins Major Court Battle Against
Greenwashing, Forbes, 8 December 2021. For advertising code claims, see: HSBC faces
greenwashing accusations from UK advertising watchdog, Financial Times. For derivative
actions by shareholders, see: We’re taking Shell’s Board of Directors to Court, ClientEarth.
As far as the authors are aware, there not yet any cases in the public domain for market
disclosure regulation breach claims or breach of contractual provisions claims (for example
a claim for misrepresentation by disclosure or omission of green or climate-related data by a
private party pursuant to commercial contracts against their contractual counterparties).
109

110

For example, under the Superannuation Industry (Supervision) Act 1993 (Cth)111

Investors back legal petition against Shell directors over climate goals, Financial Times

Institutional investors back Shell board lawsuit over climate risk, Reuters, 10 February
2023
112

113
For example, see Deutsche Bank’s DWS and allegations of greenwashing, Reuters, 9 June
2022; DWS is in Deep Doo-Doo Over Greenwashing – Here’s Why, Morningstar, 6 June 2022
114
For example, see HSBC faces greenwashing accusations from UK advertising watchdog,
Financial Times

For example, see ASIC acts against greenwashing by energy company, ASIC, 27 October
2022

115

116
For example, damages are being claimed by shareholders in the Enviva class action.
Enviva Securities Fraud Class Action Lawsuit Pending: Contact Levi & Korsinsky Before
January 3, 2023 to Discuss Your Rights, Bloomberg
117
Early signs of this are being seen in the sustainability-linked bonds market: HSBC:‘Inklings’ of more nuanced investor demands of SLB targets, Environmental FinanceDutch airline KLM sued over ‘greenwashing’ ads, Reuters, 6 July 2022; Swedish courtbans Arla’s net-zero advertising claim: Sweden’s Patent and Market Court found Arla Foods’
use of the expression “net zero climate footprint” to be misleading.
118

119

Alcantara Wins Major Court Battle Against Greenwashing, Forbes, 8 December 2021

120

See also Dorris v. Danone Waters of America, 2022

Best practices are outlined in Fighting greenwashing.. what do we really need?, 2 Degrees
Investing, July 2022
121

122

Fighting greenwashing.. what do we really need?, 2 Degrees Investing, July 2022

Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities andRegions, United Nations High Level Expert Group on the Net Zero Emissions Commitmentsof Non State Entities
123

124

See section above on ”Net Zero Integrity” in Chapter C. Evolving Regulation and Guidance125

Net Zero Asset Managers initiative Commitment

90

91

Abrahams v Commonwealth Bank of Australia (2021), Equity Generation Lawyers

103

88

89

Net Zero by 2050 A Roadmap for the Global Energy Sector, IEA

101

Further guidance for asset managers has been issued in various jurisdictions, including
by the UK’s Financial Conduct Authority, in its Guiding Principles. FCA UK Letter to AFM
Chair on Authorised ESG & Sustainable Investment Funds: improving quality and clarity, 19
July 2021
126

Investors file lawsuit against VW over climate-change related lobbying disclosures,
Reuters, 21 October 2022. In this case, investors have filed a claim against Volkswagen
for refusing to discuss at its annual general meeting whether its lobbying activities could
threaten their investments. This example identifies the risk in not disclosing or aligninglobbying with green claims.
127

Recommendation of the G20 Sustainable Finance Working Group and the UN Net Zero
Report128

Mighty Earth files complaint with US Securities and Exchange Commission against JBS‘green bonds’ - Mighty Earth9926

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