Greenwashing is a generic term used for breaches of various legal provisions ranging from unfair competition, securities rules and unethical advertising to wrong corporate disclosure. This paper focuses on corporate disclosure rules with a focus on banks as deposit taking institutions. Against the background of the large needs for private sources of sustainability financing in order to meet the objectives of the European Climate Law (ECL), the EU sustainability corporate reporting and due diligence as well as the EU Taxonomy constitute an ambitious legislative framework aimed at establishing harmonized and comparable sustainability corporate data among firms and across time. This framework is a cornerstone for combating greenwashing because it raises the responsibility for inaccurate disclosure. The success of the regulatory framework will heavily rely on its credible implementation, including penalties, that will contribute to anchoring the expectations and conditioning the behaviour of economic agents. The paper concludes that this regulatory framework is far reaching and effective. The paper also formulates a number of recommendations for the way forward and sets out that any future legal framework for greenwashing should be linked to the corporate sustainability disclosure framework.
Nieto et al. (Wed,) studied this question.