The Reserve Bank of India (RBI) will join 12 international regulators in the Global Financial Innovation Network (GFIN)’s first-ever Greenwashing TechSprint to develop a tool to help regulators and the market effectively tackle the risks of greenwashing in financial services.
- Greenwashing refers to misleading the general public into believing that companies, sovereigns or civic administrators are doing more for the environment than they actually are.
- This may involve making a product or policy seem more environmentally friendly or less damaging than it is in reality.
- The term was coined by environmentalist Jay Westervelt in 1986.
- The phenomenon came into practice as consumers and regulators increasingly sought to explore planet-friendly, recyclable and sustainable ‘green’ products.
- By 2015, 66% of consumers were willing to shell out more for a product that was environmentally sustainable.
- Greenwashing is done primarily for a company to either present itself as an ‘environment-friendly’ entity or for profit maximisation.
- It is achieved by introducing a product, catering to the inherent demand for environment-friendly products.
- In certain instances, it is done using the larger idea as a premise to cut down on certain operational logistics and providing consumer essentials.