More than half (52%) of financial services professionals believe ‘greenwashing’ is rife within the industry, with competitors deliberately misleading customers about their sustainable practices. That’s according to a global poll of 550 decision-makers at financial institutions including banks, hedge funds, insurance and pensions firms, conducted by the data-driven thought leadership agency, iResearch Services.

The findings reveal that more than a third (38%) believe every business is operating in an unethical fashion by claiming to be operating sustainably. 

Greenwashing is the practice of an organisation disseminating disinformation to the public to present themselves as environmentally responsible or detracting from other, less sustainable practices by focusing on new initiatives that appear more green or ethical. 

In March, the European Union’s Sustainable Finance Disclosure Regulation came into effect to ensure firms are comprehensively disclosing how committed to sustainability they really are.

Commenting on the findings, Kevin Anthony, Associate Director of Sales – Thought Leadership at iResearch Services, said: “It’s clear that those working in the financial services industry feel organisations are indiscriminately misleading customers to save face and avoid public scrutiny. In doing so, these businesses are risking an even greater backlash in the form of regulatory clampdowns and the potential loss of trust from the public.”

When asked to rank what the reasons were from stopping their organisation becoming sustainable, the respondents said:

• 45% are prohibited by the costs involved to implement sustainable initiatives
• 36% are still managing the short-term impact of Covid-19
• 36% lack the resources to become sustainable
• 30% are deliberately waiting for regulation to brought in to force them to become sustainable
• 18% have held off because they don’t see the value in becoming sustainable

Anthony added: “There is a clear lack of trust within financial services that businesses are talking the talk, as well as walking the walk, when it comes to adopting a more environmentally-friendly business model. This can only be achieved through a shift in mindset within the boardroom to make this a reality.

“Perhaps the most striking statistic is that less than one in five said they had held off adopting sustainability practices before they saw no value in it. As sustainability initiatives are heading to the top of the agenda across the public and private sector, firms operating in the financial services industry would do well to understand the impact it has, not just on the environment, but on their bottom line.”