How it works
GreenWatch is a tool used by the financial services sector to assess and monitor the authenticity of climate-friendly green claims made by companies on their website and/or in their publications/statements. GreenWatch provides data based on two key variables:
Green statements & Carbon score.
Using cutting-edge artificial intelligence and machine learning, statements which promote green credentials are identified. These statements are then verified and further categorised as necessary by our team of dedicated sustainable finance experts.
Carbon data, as publicly reported by each company, is also collated and categorised based on disclosure level, completeness, and performance.
The final assessment compares the green statements and carbon scores of each entity to determine whether the quantitative data supports the entity’s qualitative claims or, put another way, who talks the talk and walks the walk on climate change.
The rise of fake news has resulted in a wide discrepancy between the attention given to the scientific understanding of an issue versus misinformed and sometimes purposefully disinformed claims (false information that is purposely spread to deceive people) coming from outside the scientific community. One such example relates to climate change, where a nature study shows that climate change contrarians are featured in 49% more media articles than scientists, despite the overwhelming consensus in the scientific community over the significance of anthropogenic climate change. In addition, many companies worldwide make inaccurate and often misleading claims about their environmental and social performance, which in turn has led to the widespread practice of greenwashing.
Greenwashing is a broad umbrella term for different forms and practices of misleading communications of different organisations, in relation to their performance on environmental, as well as broader Sustainable Development Goals (SDG) related indicators.
The different forms of greenwashing include, but are not limited to selective disclosure, symbolic management, deflection of public attention and the disconnect between claims of companies and their lobbying and investment activities. Greenwashing can range from slight exaggeration to full fabrication
The most direct impact of greenwashing is that it hampers the accurate measurement as well as meaningful progress towards SDGs. Both the EU Commission and the Irish Government have called for sustainable finance policy that discourages greenwashing but so far, there are no tools to detect the type and extent of greenwashing practices across different types of organisations and SDGs.
Furthermore, in the Ireland for Finance 2025 strategy for the Irish financial sector, the government envisages that Ireland could develop a sustainable finance and greenwashing detection industry, in a similar manner that Ireland’s anti-money laundering detection services have in the past. In the context of climate change mitigation, society may develop a false sense of comfort that climate goals would eventually be reached, but in reality, that would be far from the truth given the distorting effects of greenwashing. This would indeed lead the world towards a catastrophic scenario beyond 2°C warming above pre-industrial levels.
The detection of greenwashing across a large set of organisations has so far been a challenge, given the volume of disclosures and the numerous communication channels that companies employ to make their SDG related performance known to policymakers, investors, consumers and other stakeholders.
Moreover, only in the past 10 years, several independently assessed environmental and social performance indicators of companies have started to emerge to judge the actual performance of companies, regardless of their claims. These are still however not perfect, have limited coverage of companies and geographies and sometimes still rely on company self-disclosure for their assessments.