ANNOUNCEMENTS
The rapid growth of sustainable finance has positioned green financing as a critical instrument for advancing environmental objectives and aligning capital flows with global sustainability goals. As financial institutions increasingly adopt environmental, social, and governance (ESG) frameworks and introduce "green" financial products, concerns have simultaneously emerged regarding the prevalence of greenwashing—the practice of misrepresenting the environmental benefits of financial activities. This study aims to critically examine the risk of greenwashing within the financial sector’s investments, focusing on how financial institutions construct, communicate, and verify sustainability claims, and to what extent these claims reflect authentic environmental responsibility. With a particular attention paid to the issue of financed emissions, specifically Scope 3, Category 15 emissions as defined by the GHG Protocol, the study uses both primary and secondary data to assess the impact poor disclosure practices have on the credibility of financial institutons.
The findings reveal a complex landscape in which institutions are incentivised to adopt sustainability narratives without sufficient regulatory or reputational deterrents against misleading claims. While some organisations demonstrate a genuine commitment to sustainability, others engage in selective disclosure and symbolic environmentalism. This thesis aims to contribute to the growing body of literature by framing greenwashing not merely as a communicative distortion, but as a structural challenge to the legitimacy of green finance. It concludes by identifying loopholes within regulatory frameworks, accountability mechanisms, and more transparent and verifiable sustainability practices within financial institutions.
Keywords: Greenwashing; sustainability ethics; financial institutions; ESG (Environmental, Social and Governance); financed emissions; Scope 3 emissions; PCAF (Partnership for Carbon Accounting Financials); regulatory accountability; sustainable investment; environmental integrity; stakeholder trust; thematic analysis.
