WATCH: Beware of Greenwashing! What To Watch Out For When Investing In ‘Green’ Financial Products
We can safely agree that the term ‘green’ has long become a 21st-century buzzword as we (hopefully) become more environmentally conscious of our lifestyles and the products we buy or use.
As more businesses, including financial institutions, now offer ‘green’ products, so grows the risk of consumers being scammed into investing in green products falsely marketed as sustainable. This is known as ‘greenwashing’, and yes, you’ve guessed it, it’s based on the term ‘brainwashing’.
So, how can you avoid this? LovinMalta sat down with Maria Cassar, an analyst for conduct supervision with the Malta Financial Services Authority, to unpack the greenwashing phenomenon and how to keep an eye out for green scams.
‘Greenwashing’ refers to when a product service provider falsely markets a financial product, like a loan or an investment, as sustainable when it is not the case. Imagine a thin coat of green paint frantically being spread across a purple door to make it appear green.
According to Cassar, genuine green and sustainable financial products follow strict environmental, social and governance factors (EGSs). She also explains that while it is misleading and even illegal to falsely market a product as such, consumers can prevent being misled by asking for documented proof from banks or investment advisors on whether a particular product is green or not.
Have YOU ever experienced greenwashing?
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