Why greenwashing is harder to spot than ever

The numbers look better. The problem isn't.

Here's something that might surprise you: by at least one measure, greenwashing is actually declining. A RepRisk study recorded a 12% drop in greenwashing incidents globally in 2024 — the first annual fall in six years. Regulators are paying attention. The days of a company slapping 'eco-friendly' on a product with zero evidence seem to be fading.

So why does it feel worse than ever?

Because the headline number hides what's really happening underneath it.

Greenwashing didn't disappear. It got smarter.

The old version was blunt — a fossil fuel company claiming carbon neutrality with nothing to back it up, a fund calling itself 'green' while holding the same stocks as everyone else. Those moves got companies into legal trouble, and rightly so.

But greenwashing learned from that. What's replaced it is harder to call out, harder to prove, and much easier to walk past without noticing.

1. 1
   Selective disclosure
   Companies don't lie outright. They just choose what to report. A firm might publish its renewable energy consumption while quietly omitting supply chain emissions — which can be 10 to 100 times larger. Everything they've said is technically true. The picture they've painted isn't.
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2. 2
   Unverifiable offset claims
   'Carbon neutral' sounds definitive. In practice, it often rests on offset programs that fund projects which would have happened anyway — or that quietly unravel years after the credit was issued. One study found over 90% of a major certification body's rainforest credits didn't represent genuine carbon reductions. The label survived. The impact didn't.
3. 3
   ESG score gaming
   ESG ratings from different providers can disagree by as much as 70% for the same company. The reason is structural: most methodologies measure how a company manages risk to itself, not what its operations actually do to the world. That's why a fossil fuel producer can score well on ESG while continuing to expand extraction. The score is real. The impact signal isn't.
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4. 4
   Greenhushing: the invisible problem
   Something new is happening, and it gets less attention than it deserves. Facing regulatory scrutiny and political backlash, many companies have stopped talking about their sustainability commitments altogether. They're not exaggerating anymore — they're going silent. For investors trying to understand what their money supports, silence turns out to be its own kind of problem.
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5. 5
   Fund labeling ambiguity
   'Sustainable.' 'Responsible.' 'ESG-aligned.' 'Impact.' These words appear on thousands of funds and they don't mean the same thing twice. Despite the EU's SFDR — one of the most ambitious attempts to impose consistency — research found that fund classification had limited effect on how funds actually invest. The label changed. The portfolio often didn't.

Frequently asked questions

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This isn't just a moral problem. It's a financial one.

Most of the conversation around greenwashing focuses on ethics — and fair enough. Being misled about what your money supports matters. But there's a harder-nosed case to make here too, and it doesn't get made often enough.

"When capital flows to companies with strong sustainability marketing rather than strong sustainability practice, it bypasses the businesses actually driving solutions — and the returns that come with them."

— Ziggma, Impact Investing Research

The evidence for genuine impact investing is actually compelling. Research by Schroders and Oxford Saïd Business School found that impact-driven equity portfolios outperformed the market by up to 9%, with less volatility. The companies solving real problems — clean energy, healthcare access, the circular economy — tend to deliver stronger, more resilient returns over time.

Greenwashing is the mechanism that redirects capital away from those companies and toward the imitators. Which means it doesn't just mislead your values. It may be quietly costing you returns too.

The answer to greenwashing isn't better storytelling. It's better data.

At Ziggma, we don't think the solution to misleading sustainability claims is more sustainability claims. It's transparency — the kind that can actually be checked.

That's why we partner with ACA Ethos, a leader in high-quality ESG and impact intelligence, to give you facts your broker won't show you.