Europe's financial services providers have made "misleading claims" about sustainability profiles of products, the European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) said in submissions to the European Commission's ongoing investigation report into greenwashing.
"The assessment confirmed that misleading claims may relate to all key aspects of the sustainability profile of a product or an entity such as ESG governance and resources," the European Securities and Markets Authority (ESMA) said in its report, adding that "cherry-picking, omission, ambiguity, empty claims (including exaggeration), misleading use of ESG terminology such as naming and irrelevance, are seen as the most widespread misleading qualities."
A report by Reuters on 1 June said The European Banking Authority (EBA) said analysis of greenwashing in the EU since 2012 shows a clear increase in the total number of potential cases across all sectors, including EU banks.
"The analysis of examples of greenwashing in the EU banking sector indicates that a bank can potentially engage in greenwashing in multiple ways, mostly at entity level, while greenwashing seems rather limited at product level except in the case of investment products," the EBA said.
"Greenwashing has a substantial impact on insurance and pension consumers," said the European Insurance and Occupational Pensions Authority (EIOPA).
EBA, ESMA and EIOPA will publish final reports on greenwashing in May 2024 and propose recommendations on possible changes to EU rules.
