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Transitions, offsets at greenwashing’s next frontier in Asia: investor group

Janice Lim

Janice Lim

Published Mon, May 1, 2023 · 05:50 AM
    • Financial institutions in Asia may soon find themselves being accused of greenwashing in a variety of new forms. This includes instances where they have provided transition finance to high-carbon emitting companies that do not have credible transition pathways, included greenwashed companies in their green portfolios, marketed a company or product as green even though it relied on carbon credits to offset its emissions, or are being policed by their competitors.
    • Financial institutions in Asia may soon find themselves being accused of greenwashing in a variety of new forms. This includes instances where they have provided transition finance to high-carbon emitting companies that do not have credible transition pathways, included greenwashed companies in their green portfolios, marketed a company or product as green even though it relied on carbon credits to offset its emissions, or are being policed by their competitors. PHOTO: PIXABAY

    THE NEXT frontier of greenwashing could include unsubstantiated claims of transition financing or an over-reliance on offsets, says a report by the Asia Investor Group on Climate Change (AIGCC) and environmental law non-profit ClientEarth.

    The report, an in-depth look at greenwashing in Asia’s finance industry, said that regulators will need to contend with emerging –and creative – forms of misleading environmental claims.

    “Transition-washing” is particularly complex, given the rising importance of transition finance by financial institutions and regulators in this region. Transition finance refers to providing interim capital for high-carbon activities until they can be replaced with greener alternatives.

    greenwashingClimate financingsustainable finance

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