The European Supervisory Authorities (ESAs) have published a common high-level understanding of greenwashing as part of their progress reports on assessing greenwashing in the financial sector. The European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA), have determined that greenwashing is: “A practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants.” The ESAs also said that “sustainability-related misleading claims can occur and spread either intentionally or unintentionally and in relation to entities and products that are either within or outside the remit of the EU regulatory framework”. The EBA, EIOPA and ESMA have also outlined their current progress on investigating greenwashing across banking, insurance and pensions, and financial markets. They will be publishing their final greenwashing reports in May 2024, which will outline their final recommendations to the European Commission, such as possible changes to the existing EU regulatory framework.
