Greenwashing and the role of auditors

Greenwashing is likely to damage a company's reputation when deceptive activity is discovered. Under the term " green washing ” is commonly understood when a company engages in practices to mislead or exploit the desire for environmentally friendly products or services. This is done by creating a false impression that its actions, goals or products are more environmentally friendly than they actually are. We explore how auditors and financial boards can measure best practice in an area of increasing regulatory focus.

Greenwashing can mislead investors and consumers, who may forgo savings on similar products and services by paying a premium for what they perceive to be a "greener" product. Ultimately, this practice poses a serious business risk. This is particularly worrying as a recent worldwide review of randomly selected Competition and Markets Authority websites found that 40 % green claims made online could be misleading. (Aoiffe Moran, Joanne O'Rourke, more at lexology.com)