This blog post examines the deceptive practice of greenjacking. Before delving into the main topics, we provide some context about ESG.
ESG Background
The concept of Environmental, Social, and Governance (ESG) has a rich history dating back centuries, with various religions aligning investment decisions with what would now be considered ESG factors.
In the 1960s and 1970s, socially responsible investing (SRI) emerged, with investors excluding stocks or industries based on activities that conflicted with their values.
In 2006, the term "ESG" was coined in the United Nations Principles for Responsible Investment (PRI) Report, which outlined the integration of ESG factors into investment practices.
Fast forward to the present day and ESG assets under management are expected to reach $33.9 trillion tn by 2026, constituting 21.5% of global assets under management, according to PwC's Asset and Wealth Management Revolution 2022 report. That's big business.
The ESG and Greenjacking Link
However, greenjacking poses a significant threat to the integrity of ESG investing by allowing companies to falsely claim alignment with ESG principles by using the name or logo of a legitimate organization without permission.
Greenjacking not only undermines the credibility of ESG investing but also risks damaging the reputation and financial health of legitimate organizations, making it essential for investors and organizations to ensure the authenticity and accuracy of these claims.
What Is Greenjacking?
Greenjacking refers to the sneaky practice where unauthorized parties hijack genuine environmental efforts for their own gain.
This can involve using green initiatives as a platform to gain publicity, further personal agendas, or distract from less sustainable actions, often without proper permission or offering fair compensation.
It's essentially exploiting the goodwill of green causes for selfish ends.
Greenjacking, unlike greenwashing, isn't about organizations making false or deceptive environmental claims. Instead, it's about unauthorized individuals or groups taking over real green initiatives for their own purposes.
This can happen in many shapes and forms across a range of fields, from advertising to politics.
The practice of stealing someone else's thunder without cost is common in sports events, given their capacity to draw large audiences. Naturally, official sponsors who may have shelled out as much as US$300 million for the privilege aren't thrilled about these freeloaders garnering attention.
Examples of Greenjacking
1. Political: Greenjacking can occur in the political arena when politicians or political parties make false or exaggerated environmental claims to gain support or divert attention from other issues.
2. Corporate: This happens when companies falsely position themselves as environmentally responsible or conscious through their marketing campaigns, sponsorships, or partnerships. They may associate their brand with green causes or events without actively contributing to those causes or adopting sustainable practices within their operations.
Impact of Greenjacking
Greenjacking undermines the credibility and effectiveness of genuine environmental efforts and can dilute the meaningful impact of authentic green initiatives by diverting attention and resources away from them.
This may erode public trust in environmental messaging, cause reputational and financial damage, lead to skepticism and apathy towards legitimate sustainability actions.
By falsely associating themselves with green causes, greenjackers may also siphon support, funding, and public attention away from organizations and individuals who are genuinely working towards a sustainable future.
This diversion of resources can hinder progress in addressing environmental challenges and achieving meaningful change.
Greenjacking can have a significant impact on a charity's reputation, including misrepresenting the charity's values and causing confusion among donors and supporters.
Negative media coverage can further compound the damage.
Combating Greenjacking
The prevalence of social media acts for and against victims of greenjacking. For in that there is an online community ready and willing to call out miscreants through fact checking, commenting, asking online and more.
In the era of rapid information dissemination across languages and borders, tackling greenjacking becomes a resource-intensive endeavour; not just an environmental or ethical issue, but significantly impacts investors too.
Greenjacking can lead to a false perception of a company's commitment to social and environmental responsibilities, misleading investors who prioritize Environmental, Social, and Corporate Governance factors in their investment decisions.
Everyone has a role to play in promoting honest communication about environmental efforts and in discouraging deceptive practices.
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