Greenwashing in the financial sector
Young professionals today are increasingly aware of the importance of sustainability in the financial sector. This was made clear at the recent SDG Young Leaders Network meet-up about greenwashing in the financial sector, where a new thematic group called Young Sustainable Finance (YSF) was launched. YSF aims to accelerate the Sustainable Development Goals (SDGs) through the power of the financial sector, bring together young professionals in and around the field, and become the leading young professional community in sustainable finance.
Hosted by Houthoff, the meetup welcomed over 50 young professionals, who engaged in constructive (break out) discussions and networking sessions. Jan Willem van Gelder of Profundo, along with several Houthoff colleagues, served as keynote speakers, highlighting that greenwashing is a common practice that needs to be addressed. Greenwashing refers to the deceptive practice of organizations making themselves appear more sustainable than they actually are through tactics such as green crowding, green lighting, green shifting, green labeling, green rinsing, and green hushing.
It was also noted that the Environmental, Social, and Governance (ESG) concept was created due to public pressure on the financial sector since 2000. However, ESG has been criticized for not affecting business as usual, having flawed screening, and not delivering on its promise.
Discussions during breakout sessions included legal and regulatory developments related to greenwashing. For example, it was highlighted that legal action could be taken against companies and countries for misleading sustainability claims. Although NGOs have pursued this in the past, financial institutions may also resort to litigation, in addition to divestment, for broken sustainability promises.
To avoid greenwashing, it is necessary to be serious about sustainability. This can be achieved by simulating change from within, combining commitments to sustainability with critical minds, questioning all ESG/sustainability aspects in the workplace, and making strategic choices to finance the transition to more sustainable business.
What can young professionals do against greenwashing?
Young professionals can use their skills, knowledge, and experience to prevent greenwashing by creating psychological safety to share ideas openly. They can also use platforms like young boards and reverse mentoring, make use of viable business cases for a shift to more sustainable business, and use an energizing and visual way of presentation.
All in all, we look back at a successful event and want to give a special thank you to Nadir Koudsi and Ewoud van der Leek from Houthoff for hosting our event and to Jan Willem for being our keynote speaker.
Would you like to know more about YSF and the SDG Young Leaders Network?
If you want to learn more about the SDG Young Leaders Network, visit their website here SDG Young Leaders Network – UN Global Compact Network Netherlands or reach out directly to firstname.lastname@example.org.
Let’s work together to accelerate the SDGs and make the financial sector more sustainable!