Greenwashing is a term that is difficult to be translated from English in Romanian, as it is with many new terms used in last years.
As a simple definition, greenwashing is the process when an organization spends time and money on marketing the business as environmentally friendly without taking measures for minimizing its environmental impact. Greenwashing a misleading marketing stratagem intended to trick consumers who prefer to buy goods and services from environmentally conscious brands.
Is greenwashing a crime? It may be, depending on country and applicable regulations. The regulatory risk is an important risk in a greenwashing scandal. The fines, court cases and investigations are one aspect, but the following one is related to reputational risk. The reputation of an organisation is very important, and if it is lost, it is very difficult to re-build trust. Accusations of greenwashing may refer to mandatory disclosures, or to marketing communications. Negative media coverage is bad for a company, even though some public communication specialists would say that negative publicity is still a publicity. The brand loyalty may be impacted over the short and long term after a greenwashing scandal. The financial risk is referring mainly to the negative impact resulted from regulatory and reputational risk.
In May 2023, the Chartered Governance Institute UK & Ireland published a report on tackling greenwashing from a corporate governance perspective Tackling greenwashing from a governance perspective (cgi.org.uk). The report is welcomed and presents how governance professionals (and not only) should manage such a process and the importance of being transparent.