Greenwashing is when companies or investment products overstate, exaggerate, or misrepresent their commitment to environmental factors to attract investors or improve their public image. It is a deceptive marketing strategy that projects a false impression of a company’s environmental performance, which gives investors and stakeholders the impression that the company is more sustainable and responsible than it is. 

Given the slow speed in which new proposed ESG (Environmental, Social, Governance) rules are made law, investors must do their due diligence to determine whether companies are doing what they say they are doing – or just misleading them with deceptive marketing and public relations tactics. 

In March of 2022, the SEC made climate-related disclosures mandatory for public companies. They also proposed several new rules, which would require companies, funds, and advisors to share their environmental strategies with investors. This would make it more difficult for companies to engage in greenwashing. Whistleblowers play a vital role in exposing greenwashing, as they can reveal information about unethical or illegal practices within organizations that affect the future of our climate.