What does 'greenwashing' refer to?

Study for the CFA Sustainable Investing Certificate. Use flashcards and multiple-choice questions; each question provides hints and explanations. Prepare effectively for your exam!

'Greenwashing' refers to the practice where an organization promotes its practices or products as being more environmentally friendly or sustainable than they actually are. This misleading marketing tactic is often used to attract consumers who prefer to support businesses with sustainable practices, without the organization making significant efforts towards genuine sustainability.

Essentially, companies engaging in greenwashing aim to enhance their public image or gain competitive advantage by portraying themselves as environmentally responsible while not fully committing to sustainable practices. This can lead to consumer skepticism about sustainability claims and damages the credibility of truly sustainable efforts in the marketplace.

The other options, while related to environmental practices and sustainability, do not define greenwashing. For instance, reducing emissions is a positive action towards sustainability, creating authentic sustainable products is aligned with genuine efforts, and implementing strict environmental regulations denotes a systemic approach to promoting sustainability at a governmental or organizational level. None of these options imply the deceptive nature of greenwashing, which is central to understanding what it entails.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy