Greenwashing: A False Shade of Green

Greenwashing—the practice of falsely advertising or exaggerating a company’s environmental efforts—has become a convenient tool for businesses seeking to ride the sustainability wave. From misleading claims to vague buzzwords, companies appeal to eco-conscious consumers without making any meaningful change. While this strategy may bring short-term gains, it exposes companies to growing scrutiny, erodes public trust, and ultimately risks significant backlash.

The Allure of Greenwashing

Rather than committing to meaningful changes, some companies view sustainability as merely a marketing tool, using false claims to differentiate themselves in a competitive market. They resort to greenwashing to gain a competitive edge without investing significant resources in genuine sustainability efforts. By falsely portraying themselves as eco-friendly, these companies exploit opportunities to charge premium prices and enhance their market positions. For many, market pressures and the allure of financial gain outweigh a true commitment to environmental responsibility, perpetuating widespread greenwashing practices.

Why Transparency Matters?

In today’s world, sustainability reporting is no longer just a nice-to-have—it’s increasingly an expectation.

This shift is driven by multiple forces:

Generation Z, the first digitally native and highly socially conscious consumer group, is calling out businesses that fail to align with their values.
Investors are steering their portfolios toward companies with credible Environmental, Social and Governance (ESG) practices.
Globally, regulators are catching up. ESG disclosures are becoming mandatory in many jurisdictions, and even in Singapore, the pace is accelerating.

While companies here may not yet face the same pressures as those in Europe, they cannot afford to be complacent. Therefore, transparency is no longer optional—businesses that fail to meet rising expectations risk being left behind.

Facing Scrutiny from Regulators

Around the world, regulatory bodies and watchdog organisations are intensifying efforts to crack down on deceptive sustainability claims.

Case Study: Volkswagen

A prime example of greenwashing can be seen from Volkswagen–where it was caught using a "defeat device" in diesel vehicles to manipulate emissions tests, making cars appear compliant while emitting up to 40 times the legal nitrogen oxide limit.

The scandal affected millions of vehicles globally, resulting in fines exceeding £30 billion and causing Volkswagen’s stock price to plummet to less than half its pre-scandal value.

Case Study: PRISM+

Closer to home, PRISM+, a well-known Singapore electronics brand, faced backlash for promoting its air conditioners as eco-friendly without credible evidence.

The Advertising Standards Authority of Singapore (ASAS) flagged the claims, deeming them misleading and a violation of the Singapore Code of Advertising Practice.

This rare crackdown sends a clear signal that even in Singapore, regulators are beginning to take a tougher stance on greenwashing.

From Deception to Accountability

Singapore’s regulatory landscape for sustainability disclosures may currently be less stringent than Europe’s, but this will not last. With ESG assurance becoming a regulatory requirement from FY2027, beginning with the external limited assurance of Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions, this marks the beginning of a broader transition towards a more rigorous landscape of sustainability disclosure. Companies need to act now—not just to avoid fines or public backlash, but to build credibility in a world that increasingly demands accountability. ESG assurance plays a vital role in this transition. By verifying sustainability claims, it ensures companies are walking the talk, not merely cashing in on sustainability trends.

More importantly, it fosters trust—an invaluable asset in a market that values authenticity.