“One area of focus right now is how companies are facing challenges posed by climate change. A whole host of companies are committing to meet those challenges head on, with many pledging to achieve ‘net zero’ carbon emissions within the next few decades.
While all this is broadly good, there’s a danger here too. As scrutiny ramps up, so does the incentive for companies and funds to promote their green credentials. That’s leading some to exaggerate what they are doing, either to appeal to investors or appease regulators. This process is known as ‘greenwashing’.
Greenwashing is not only a worrying trend in principle. It also poses a serious challenge to investors.”