ESG scores and greenwashing risk
Manuel C. Kathan and Sebastian Utz, together with colleagues, have published the article ‘What you see is not what you get: ESG scores and greenwashing risk’ in the international journal Finance Research Letters. The research paper shows that greenwashing allegations are most prevalent among large companies with high ESG ratings.
Key Messages:
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ESG scores are positively correlated with greenwashing cases.
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ESG scores mainly measure the apparent rather than
the real environmental performance. -
Higher analyst coverage limits the exaggeration of
apparent environmental performance.
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Professor
Prof. Dr. Sebastian Utz: Finanzwirtschaft mit dem Schwerpunkt Climate Finance
- Phone: +49 (0)821 598 4341
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(Corresponding author)
Capturing of greenwashing allegations based on ESG assessments
The study analysed the relationship between actual greenwashing allegations and ESG ratings for the STOXX Europe 600 constituents. Greenwashing allegations are most common among large companies with high ESG scores. This is