Stock exchange, only three out of ten companies monitor greenwashing
This is what emerges from the analysis of the results of the ESG Observatory carried out by Plus24, Ufficio studi Sole 24 Ore and Milano-Bicocca University
Key points
Inconsistency between saying and doing sustainable things.Greenwashing. Greenwashing. Everyone is concerned about this phenomenon that can jeopardise the reputation of companies. A risk to be monitored therefore. Well, the results of the Esg Observatory of Plus24-University Milano Bicocca, show that only 30% of the companies surveyed have created safeguards to monitor and manage greenwashing.
Reputation to protect
Companies know that building a reputation is laborious and very expensive; taking care of it is a key factor in a world increasingly hostage to social media.
"Today, reputation is the key element in the ESG panorama," confirms Alessia Pedrazzoli, researcher of Economics of Financial Intermediaries at the University of Milan-Bicocca and one of the authors of the analysis of the survey results. "As the Observatory data show, companies' attention to the reputational risks linked to social media is growing strongly, especially among the most advanced realities in terms of sustainability. Those, on the other hand, that record mediocre ESG performance tend to underestimate these dangers, considering them only marginally relevant'. He adds: "Reputation emerges as the main advantage perceived by companies, but it also proves to be a strong vulnerability for those who do not possess the appropriate tools to prevent possible errors. Emblematic is precisely the fact that only 3 out of 10 companies monitor the risk of greenwashing".
The Governance Indicator
The investigation into greenwashing is a crucial junction in the analysis of the ESG Observatory's data. The difficulty of managing and monitoring this risk is an alarming factor, especially since the companies involved in the survey are all listed and, therefore, a reputational incident could create many problems. "It is therefore imperative that companies that embrace sustainability," Pedrazzoli points out, "demonstrate unimpeachable consistency and correspondence between what they declare and what they do, to ensure that it is perceived as a lasting asset and not as a passing fad.
The greenwashing risk analysis was carried out by the researchers as part of the construction of the Governance indicator. The report points out that "looking at the distribution by sector, companies operating in the utilities have the highest level of Governance of the whole sample (well above 0.80, ed.), while energy (0.42) and healthcare (0.44) show the lowest levels among the sectors with sufficient values".
