The Greenwashing Files · Part 1 of 3
Most investors who care about impact have already done the obvious things — picked funds with ‘sustainable’ in the name, steered clear of the worst offenders, maybe swapped into a green ETF. It feels like the right call. And for a long time, you had no easy way to check whether it actually was.
That’s changed. The data now exists to look at what your portfolio actually does to the world — not what the fund name implies, not what the sustainability report claims, but what the companies you own are measurably doing. The hard part isn’t accessing that information anymore. It’s knowing what to look for.
This is a practical guide to doing exactly that.
Greenwashing doesn’t hide in one place. It operates at three different levels — and each one needs a different lens to see through it.
Not what it plans to reduce. Not what it offsets. Its real, measured greenhouse gas emissions — and whether they’re going up or down over time. A company can have a glossy net-zero pledge while its actual emissions are rising year on year. The Climate Score is built to show you the difference.
Beyond emissions, you need to know what a company’s operations, products, and supply chain do to people and the planet — across climate action, resource use, fair labor, accountability, and more. That’s what the Impact Score measures.
The Controversy Score tracks real-world incidents — regulatory actions, NGO investigations, supply chain scandals — that reveal the gap between what a company says and what it actually does.
Climate Score
The Climate Score measures a company’s track record on cutting greenhouse gas emissions — Scope 1 and Scope 2 — as well as its net zero targets where they exist. It’s quantitative and based on verified data, not press releases. A company that’s been steadily reducing emissions scores well. A company with soaring emissions and a flashy 2050 pledge does not.
What makes it useful for spotting greenwashing is precisely what it ignores: marketing. No carbon credits. No offset accounting. Just the underlying emissions trajectory.
Impact Score
The Impact Score is where the picture gets fuller. Powered by ACA Ethos — one of the most rigorous impact data engines available — it analyzes around 600 metrics across more than 80 impact topics. It covers:
That last category — Accountability — is one most investors overlook entirely. A company can score well on climate while spending heavily lobbying against environmental regulation. The Impact Score sees both.
Controversy Score
The Controversy Score tracks what actually happens between sustainability reports. It monitors real-world incidents daily — regulatory actions, legal disputes, NGO investigations, supply chain scandals — anything that signals a gap between stated values and real behavior.
Together, the three scores give you something no fund label can: a clear, data-backed picture of what you actually own.
ESGU — the iShares MSCI USA ESG Optimized ETF — is one of the most widely held sustainable funds in the world. It’s also a useful illustration of how greenwashing can be structural rather than intentional.
The fund’s primary goal isn’t to make the world better. It’s to mimic the financial returns of the standard market while applying a light sustainability filter. Because it operates under a strict tracking error budget, it mathematically cannot deviate too far from the S&P 500 or MSCI USA indexes. That financial constraint forces it to maintain what its methodology calls ‘sector neutrality’ — meaning it deliberately keeps baseline exposure to industries like traditional oil and gas.
Rather than divesting from fossil fuels, ESGU uses a ‘best-in-class’ approach: it overweights the slightly less harmful operators within dirty sectors. The result is that corporate giants like ExxonMobil and Chevron routinely remain among its holdings — a fact that would surprise most investors who chose it for its green credentials.
The fund’s sustainable-looking profile is largely driven by its heavy weighting in large technology companies — Microsoft, Apple, Nvidia — which naturally have low direct emissions. That’s not the same as impact. Meanwhile, critical considerations like plastic pollution, deforestation, and political lobbying are treated as financial risks to manage rather than moral red lines.
ESGU is not a bad fund. But it’s a risk-management tool that applies a cosmetic layer to the existing corporate status quo. For an investor who wants their money to starve bad actors of capital or genuinely back companies building a better future, it doesn’t do that job.
This isn’t an argument to sell ESGU. It’s an argument to know what you own — and to use data rather than labels to make that call.
Link your brokerage account or add your holdings manually. From the moment your portfolio is connected, Ziggma shows you an aggregate Impact Score and Climate Score — a single number that reflects your exposure across every position. This is your baseline. Most investors are surprised by what they see.
Navigate to the Impact tab in your portfolio view. You’ll see your aggregate Climate Score, Impact Score, and Controversy Score alongside a breakdown of which holdings are contributing positively and which are dragging the picture down. This is the view that answers the question most investors have never been able to ask: what does my portfolio actually do to the world?
Click any holding to see its individual scores across all five Impact dimensions — Climate Action, Resource Use, Fair Labor, Accountability, and overall Impact. The Controversy Score sits alongside these, updated daily. This is where you start to see which companies are genuinely well-run on impact and which ones are coasting on a strong brand.
Sort by Impact Score and Controversy Score to find the weakest links. Pay particular attention to the combination of a low Impact Score and recent controversy flags — that profile is the one most consistent with greenwashing: a company that markets itself as responsible while its behavior tells a different story.
You don’t need to read every sustainability report. These patterns show up consistently in holdings that don’t hold up to scrutiny.
Rising emissions, impressive pledges
Net-zero commitments mean little if actual Scope 1 and Scope 2 emissions are trending upward. The Climate Score is built on trajectory as well as targets — not just promises.
Strong sustainability brand, weak Impact Score
If a company is prominent in sustainable funds but scores poorly on real-world impact dimensions like Fair Labor or Resource Use, that gap is a signal. The Impact Score sees what the brand doesn’t say.
High climate score, low Accountability score
A company can be doing well on emissions while spending heavily lobbying against environmental policy. The Accountability dimension — covering lobbying, privacy, and peace and justice — catches exactly this kind of contradiction.
Controversy flags alongside sustainability marketing
Accumulating regulatory actions, NGO investigations, or supply chain scandals while aggressively promoting sustainability credentials is a classic greenwashing signature. The Controversy Score tracks it daily.
A fund label with no traceable methodology
If you own a ‘sustainable’ fund and can’t find a clear explanation of what it holds and why — with verifiable criteria rather than vague principles — treat the label as marketing.
Auditing your portfolio for greenwashing doesn’t mean you have to restructure everything. Knowing where the gaps are gives you real options.
Use Ziggma’s stock screener to find companies in the same sector with stronger Impact and Climate Scores. Staying invested in a sector while backing its best actors is often more effective than broad divestment — and has historically held up well on returns too.
Companies improve, regress, and get caught. The Controversy Score updates daily so your view of a holding stays current, not frozen at last year’s sustainability report.
The point of this data isn’t to make you feel bad about your portfolio. It’s to give you the information to make deliberate choices — so that when you invest with impact in mind, you can actually be confident you’re doing it.
The most reliable way is to look at verified, third-party impact data rather than fund labels or company marketing. Connect your portfolio in Ziggma and navigate to the Impact tab. Your aggregate Climate Score, Impact Score, and Controversy Score will show you how your holdings actually perform against independent criteria — not self-reported claims.
The Climate Score measures a company’s track record on reducing greenhouse gas emissions — Scope 1 and Scope 2 — as well as its net zero targets where they exist. It’s based on verified data, not press releases or carbon offset accounting. A higher score reflects a demonstrably better record on real emissions reduction.
An ESG score measures how well a company manages environmental, social, and governance risks to its own financial performance. An Impact Score measures what the company actually does to the world. The two can diverge significantly — a company can score well on ESG while performing poorly on real-world impact. Ziggma uses an Impact Score, not an ESG score, because the distinction matters.
The Accountability dimension within the Impact Score covers a company’s behavior on lobbying and political contributions, privacy and data management, and peace and justice. It captures the kind of behavior that often flies under the radar — a company can be a climate leader in its marketing while simultaneously lobbying against climate legislation.
The Controversy Score monitors real-world incidents involving a company — regulatory actions, legal disputes, NGO investigations, and supply chain scandals. It updates daily, which means it reflects what’s actually happening now rather than what was true when last year’s sustainability report was published.
Not at all. The scores give you information, not instructions. You can rotate to better alternatives, monitor a holding as it evolves, or simply make a more informed decision the next time you rebalance. Ziggma is built to help you understand what you own — what you do with that understanding is entirely your call.
← Part 1
Why greenwashing is harder to spot than ever
Part 3 →
Coming soonHow to build a truly impact-aligned portfolio
Next: Part 3 of 3
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