Greenwashing, which occurs when businesses misrepresent their efforts to address climate change, is “nothing more and nothing less than fraud.”
According to Eelco van der Enden, CEO of the Global Reporting Initiative, an independent organisation that provides the world’s most widely used sustainability reporting standards.
Van der Enden was speaking at the Johannesburg Stock Exchange’s CEO Connect Forum on Thursday.
“In fact, when you publish a report to influence decision-making of stakeholders — be it investors, local communities, pension funds, or whatever — and you do that by not providing facts, but made-up stories or exaggerated stories, then you are fooling your audience,” he said. And doing so with financial reports is considered fraud.”
The JSE published its finalised sustainability and climate disclosure guidance earlier this year in order to guide listed companies on best practise in environmental, social, and governance (ESG) reporting.
The document was created as more companies face scrutiny from investors and other stakeholders for their efforts to mitigate climate change.
“The JSE recognises the need to create an enabling environment for better disclosure practises, particularly in light of rapidly changing global regulation and guidance.” “The sustainability disclosure guidance is intended to help companies, regardless of their experience in sustainability reporting, align with recent and imminent changes in global standards and international best practise,” Leila Fourie, chief executive of the local bourse, said at the time.
Van der Enden expressed concern about what was happening in parts of the United States, where lawmakers are opposing ESG investment policies.
Texas Comptroller Glenn Hegar released a list of financial firms that boycott energy companies last week. Hegar is enforcing a law that requires state pension and school funds to sell their shares in these companies.
Florida Governor Ron DeSantis led a resolution earlier this week to prohibit the state’s pension funds from considering ESG criteria.
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