Is Greenwashing a Definition or only a Hinderance of Sustainable Finance?

Abstract

This article proposes a new framework to analyse greenwashing practices of companies. In order to build this framework, we first analyse the main results and the main shortcomings of sustainable finance, and notably the ESG analysis blindspots, as ESG depends too much on corporate disclosure. Second, we assess the philosophical grounds of sustainable finance. Third we review the empirical proposal made by the ESMA of risks for the financial market that could be related to greenwashing. We therefore propose a new analytical framework that may be applied to assess the greenwashing risks of a company, enabling to analyse its strategy beyond its disclosure. This framework, based on Habermas metaphysics, is then applied to 4 companies, and notably their strategy regarding EU Green Taxonomy.

Keywords: Greenwashing, sustainable investment, ESG, ethics, metaphysics, EU Taxonomy

JEL Classification: G20, G28, K22, M10