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Greenwashing
Why in News?
Recently, the RBI Deputy Governor stressed on the need for regulated entities to assess climate-linked financial risks along with a demand for a formal definition of green finance.
About
What is Environmental, social, and governance (ESG)?
These investments fall under the category of socially responsible investing, which takes into account an investment’s performance as well as how it will affect the environment, its stakeholders, and the planet.
What is green financing?
It speaks of financing ecologically friendly business ventures.
What is Greenwashing?
Dishonest methods intended to mislead people are referred to as “greenwashing.”
Greenwashing is the practise of a company putting more effort and resources into portraying itself as environmentally friendly than into reducing its environmental impact.
It is a dishonest marketing gimmick used to dupe investors who favour investments with a positive environmental impact and try to take advantage of the rising demand for environmentally friendly goods.
Need?
Regulated entities must create and implement thorough frameworks for comprehending and evaluating the potential effects of financial risks related to climate change on their business strategy and operations.
