11.4 Preventive Measures

The preceding sections reveal key factors for preventing greenwashing at public companies:

Greenwashing prevention should be an integral part of the sustainability strategy and integrated into the management processes: from strategy-setting by the board of directors to due diligence, control processes (including risk and data management) and employee training, through to marketing and the management of information flows across the entire value chain.

This includes an internally compatible anti-greenwashing policy aligned with relevant jurisdictions and international frameworks, including specific guidelines for marketing and investor relations tailored to each target market.

Such a policy must stipulate that sustainability claims must make reference to the sustainability approaches used, their implementation, and the key performance indicators by which their accomplishment is measured. They should be verifiable and measurable and accompanied by periodic reporting based on relevant indicators for implementation.

Implementation requires internal and external corporate communications, sustainability management, risk management, compliance, and the legal function to converge within the executive management. 

Sustainability-related communications must be harmonized with all other voluntary and mandatory communications, specifically the sustainability report, accounting, current and previous ad hoc announcements, and any prospectus.

The best form of prevention is good corporate governance. Not only is box-ticking inadequate – it also poses the risk of greenwashing itself if the company loses sight of its goal of sustainable economic activity. External assessment (audit, certificates, labels) further enhances trust and reduces the liability risk of the company, its board of directors, and the executive management.