Defining Greenwashing

42 Pages Posted: 16 May 2022

See all articles by Ariadna Dumitrescu

Ariadna Dumitrescu

ESADE Business School

Javier Gil-Bazo

Universitat Pompeu Fabra; UPF Barcelona School of Management; Barcelona School of Economics

Feng Zhou

Universitat Pompeu Fabra

Date Written: May 2, 2022


We propose a precise definition of greenwashing by mutual funds that combines ESG self-labels, sustainability scores of portfolio holdings, and funds' voting behavior. Armed with this definition, we are able to quantify the prevalence of greenwashing in the US mutual fund industry. Although self labeled ESG funds dominate non-ESG funds in terms of ESG ratings and voting support for ESG proposals, 24% of them are greenwashers according to our definition. Greenwashers are more likely to belong to larger and older fund families and less likely to be offered by signatories of the United Nations Principles for Responsible Investment. Importantly, while retail investors do not distinguish between greenwashers and true ESG funds, institutional investors are not deceived by the former. Our results suggest that accusations of ubiquitous greenwashing in asset management exaggerate the true extent of the problem. However, there is room for regulation aimed at enhanced ESG disclosure, at least for those funds that target retail investors.

Keywords: Mutual-fund disclosures, ESG labels, ESG ratings, ESG voting, UNPRI, Greenwashing, Sustainability

JEL Classification: G23, G11, Q01

Suggested Citation

Dumitrescu, Ariadna and Gil-Bazo, Javier and Zhou, Feng, Defining Greenwashing (May 2, 2022). Available at SSRN: or

Ariadna Dumitrescu

ESADE Business School ( email )

Av. Pedralbes 60-62
Barcelona, 08034

Javier Gil-Bazo (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005

UPF Barcelona School of Management ( email )

Carrer de Balmes, 132, 134
Barcelona, 08008

Barcelona School of Economics ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005

Feng Zhou

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, E-08005

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