Image : Pixabay / Maklay62
The word greenwashing comes up frequently in discussions about sustainable finance. It is used to warn, to question, and sometimes to shield oneself. But behind this single term lie multiple realities, often more complex than they appear.
This FAQ doesn’t claim to cover everything. Its aim is simply to offer reference points, clarify key mechanisms, and provide useful tools for interpretation.
Is greenwashing always a lie?
Greenwashing can take many forms.
Yes, sometimes it is based on intentionally embellished claims or communication that goes beyond what is actually practiced, and that is part of why the term became widely used.
But in many cases, it stems from a gap between what is announced and what can be demonstrated: incomplete data, misunderstood indicators, methodologies still being developed, or the clumsy use of a regulatory framework.
The goal is not to sort communications into “true” or “false,” but to develop the right analytical reflexes. This means learning to:
- identify what indicators do (and do not) show,
- understand the limits of an approach,
- ask the right questions,
- gradually build an informed, critical perspective.
Distinguishing a sincere ambition from an exaggeration relies less on intuition than on a few simple, learnable reference points.
Why does greenwashing persist despite regulation?
Regulatory frameworks such as SFDR, the Taxonomy, or CSRD have introduced a common language and much greater transparency.
But they require solid understanding: choosing relevant indicators, interpreting the right scope, and ensuring consistency in how the rules are applied.
In other words: regulation provides the structure, but it is the way it is used that ensures the quality (or fragility) of sustainability communication.
Articles 8 and 9: clarification or protection?
SFDR classification clarifies a financial product’s intention.
However, it says nothing about the quality of its methodology or its actual level of ambition.
Two products classified as Article 8 or 9 may rely on very different approaches.
To properly assess them, one must look beyond the label: the investment logic, the filters applied, the data sources, and the alignment with the stated objectives.
Can you commit greenwashing unintentionally?
Yes, very often.
When concepts are new, when actors have varying levels of maturity, or when data remains inconsistent, communication can become fragile even with good intentions.
This risk is not just reputational: it can also blur internal strategy and create misunderstandings about actual commitments.
Is greenwashing inevitable during the transition?
It mostly reflects a system in transformation.
The transition requires acting quickly while being able to explain methodologies clearly. As a result, communication is evolving toward greater precision, sobriety, and clarity.
This progress takes time, skill-building, and shared analytical tools.
The constraint of greenwashing: when fear of criticism limits communication
As concerns about greenwashing grow, an opposite phenomenon sometimes appears: greenhushing.
This occurs when actors deliberately reduce (or avoid) communicating about their environmental efforts, even when these efforts are solid.
Why?
Because expectations rise quickly, interpretations vary, and the fear of criticism can lead to excessive caution.
Yet greenhushing limits the spread of good practices and makes real progress less visible, even when it’s happening.
Typical examples of greenwashing in finance
⭐ 1. Impact as a marketing claim
A product presents itself as “impact,” even though it merely uses standard ESG screening, essentially sorting companies based on ESG criteria.
But selecting “better” companies does not necessarily create measurable impact.
Impact requires contributing to real‑world change.
The confusion arises because these two approaches have different objectives.
⭐ 2. Scope too narrow
An actor communicates a significant emissions reduction, but only on a very limited perimeter, without specifying that this perimeter represents a small share of its overall activity.
The performance may appear broader than it really is.
Typical examples of greenhushing in finance
⭐ 1. Climate strategy not published
A 1.5°C‑aligned trajectory exists internally, but is not shared publicly for fear of criticism regarding the interim steps.
⭐ 2. Internal improvements kept quiet
Internal ESG tools are strengthened, but the actor prefers to wait until everything is “perfect” before communicating.
What we often forget
Greenwashing does not disappear through criticism alone.
It decreases when actors understand the frameworks they use, know their limits, and can explain why they chose one approach over another.
Understanding sustainable finance is above all about reading carefully, asking questions, and interpreting with nuance, not chasing perfection.
Going further: developing a structured perspective
Distinguishing robust communication from fragile communication is not a matter of instinct, it comes with learning.
Having a few reference points on SFDR, the Taxonomy, ESG approaches or key indicators profoundly changes the way messages are interpreted.
The Essential Sustainable Finance MOOC from Horizon & Beyond provides this foundation in under two hours.
It offers a clear structure and tools to analyze sustainable finance with discernment.
👉 Enroll in the Essential Sustainable Finance MOOC by Horizon & Beyond to learn how to read sustainable finance with nuance, method, and curiosity.