Need For Action Against Greenwashing; Lack Of Transparency Can Undermine Trust In System: Govt Official

There is a pressing need to address the issue of greenwashing – the practice of exaggerating or misrepresenting the environmental or social benefits of products, services, or activities, said Anita Shah Akella, Joint Secretary, Ministry of Corporate Affairs while speaking at an event.

Speaking at the international conference on sustainability: financial accounting and reporting, Akella said, "Investors and other stakeholders rely on financial statements and sustainability reports to make decisions, and any lack of transparency or accuracy in reporting can undermine trust and confidence in the system." 

Akella highlighted the efforts of standard-setting bodies such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) in developing comprehensive frameworks and standards for sustainability reporting to enhance consistency and comparability.

She added, "In addition, building resilience in the financial sector has become important given its increasing exposure to climate change risk. To this end, regulatory measures have also been taken to mainstream climate into the financial economy."

She further said that regulators are stepping up their scrutiny of sustainability disclosures to combat greenwashing and ensure transparency and accountability. The non-compliance with reporting requirements can result in fines, reputational damage, and legal consequences. 

Regarding sustainable investing, Akella said, “The sustainable investing in India has grown exponentially, with sustainable assets under management reaching a record high of USD 10.6 billion in 2023, marking a 56 per cent increase from the previous year. Moreover, regulatory reforms such as the introduction of the Business Responsibility and Sustainability Reporting (BRSR) framework have catalysed corporate transparency and accountability."

She stated that these initiatives not only align with India's commitment to the United Nations sustainable development goals but also signal a fundamental shift towards a more responsible and resilient business ecosystem.