ESG fraud refers to illegal conduct by companies related to their environmental, social, and governance (ESG) practices. There are numerous regulations governing ESG requirements.
ESG fraud can take many shapes and forms, but often includes misrepresenting a company’s sustainability practices, social impact, or corporate governance to make the company seem more responsible and sustainable to investors than it is.
Reporting violations of ESG requirements or fraud is important because it can help to hold companies accountable for engaging in such illegal practices and prevent financial losses and reputational damage for investors.