Finance
Greenwashing, greenhushing and greenwishing: The new sustainable finance lingo | Investment Executive
“The majority of Canadians want new rules to clear out greenwashing because they’re frustrated by claims not being met with action,” said Julie Segal, senior program manager of climate finance with Environmental Defence Canada. “And a number of financial institutions also want clear rules on sustainable finance, so they can move more clearly in that direction.”
Greenwashing was one of the first terms coined in the sustainable finance discourse, but terms such as greenhushing and greenwishing have since been adopted.
Here’s what the terms mean and how some suggest putting an end to these practices.
Greenwashing
Greenwashing is the practice of making inflated or misleading claims about how environmentally friendly a company, organization or product is, said Yrjo Koskinen, a sustainable and transition finance professor with the University of Calgary’s Haskayne School of Business.
“It’s not necessarily lying, but maybe making exaggerated claims about your environmental or social policies,” he said. “Companies have a tendency of spinning or putting their best foot forward. Everybody does that, right? So, it’s commonplace.”
As Koskinen explained, greenwashing was a niche issue until 2022, when cases began making more frequent headlines in Europe, the U.S. and Canada.
This includes the high-profile case of Keurig Canada reaching a $3-million settlement after the Competition Bureau found the company’s coffee pod recycling claims were false or misleading in certain cases.
In the U.S., DWS Investment Management Americas Inc., a subsidiary of Deutsche Bank AG, agreed to pay US$25 million to settle charges over alleged greenwashing and deficient anti–money laundering controls at its mutual funds. The U.S. Securities and Exchange Commission alleged the firm made “materially misleading statements” about the ESG investment processes used for certain actively managed mutual funds and separately managed accounts.
And earlier this year, the European Commission and national consumer protection authorities started action against 20 airlines for alleged misleading greenwashing practices, among other examples.
The Canadian government’s Bill C-59, which received royal assent on June 20, is one example of the recent crackdown on greenwashing.
The legislation requires companies to provide evidence to support their environmental claims. The government said doing so will “protect consumers, competitors and the proper functioning of the market against the harms of untested representations about a product’s benefits for protecting the environment or mitigating the effects of climate change.”
The legislation has received mixed reactions. It was cited by Pathways Alliance as the reason the group of oilsands companies decided to pull its online content. The group said the provision applies a standard “so vague as to lack meaning.”
Financial services regulators have also made progress in addressing greenwashing.
In March the Canadian Securities Administrators bolstered their guidance for investment funds and fund managers around ESG-related disclosure with the goal of increasing clarity and consistency in fund documentation and sales communications.
Also in March, the Canadian Sustainability Standards Board released its draft standards for climate-related risks and opportunities based on the International Sustainability Standards Board’s standards, but with proposed modifications. The consultation on the standards wrapped last month.
Over the past decade, firms such as Morningstar Sustainalytics have established frameworks for assessing companies’ exposure to industry-specific ESG risks and risk management.
Clark Barr, head of ESG methodology with Morningstar Sustainalytics, said the firm relies not on environmental promises from companies, but rather a thorough picture of their ESG policies, programs and performance.
“This is one of the ways we avoid greenwashing, because it’s not just having a policy in place or making a document. We want to see that [impact] all the way through to the performance level,” Barr said.
Greenhushing
Greenhushing is the practice of deliberately downplaying or hiding sustainability goals, Koskinen said, noting this concept is relatively new compared to greenwashing.
One reason companies may employ this practice is because they’re afraid of being accused of greenwashing, he said. They may think that “there’s always somebody who’s going to blame us — either we do too much or too little, but [we’re] never right.”
And companies can see how politicized the issue has become, Koskinen said.
In a January 2024 analysis from global climate consultancy South Pole, 81% of companies said that communicating their net-zero targets would be good for their bottom lines. However, 58% of the 1,400 companies surveyed — across 14 countries and 12 sectors — said communicating their climate action was now more difficult, and they were planning to decrease their level of external communications.
In the realm of finance, a March 2024 report from private and public equity markets data provider PitchBook Data Inc. suggests that some asset managers are pulling back from public ESG commitments out of fear of backlash, with fewer general partners making public commitments to ESG each quarter over the past few years via the UN-supported Principles for Responsible Investment. Meanwhile, others are leaning in to ESG as a value creation and protection tool in the challenging macroeconomic environment, the report said.
Segal said the concept of greenhushing exists because in Canada sustainability reporting and disclosure standards are voluntary.
“The second something becomes mandatory, it’s no longer a decision that a business or financial institution has to make about whether they are talking about something,” she said.
Greenwishing
Less recognized than greenwashing and greenhushing is greenwishing, which has been described as a company making abstract wishes about “going green” or setting climate targets without taking action.
“Greenwishing sounds pretty much like greenwashing to me. It’s kind of inadvertent greenwashing,” Koskinen said.
Greenwishing is driven by the pressure to set ambitious sustainability goals, KPMG says on its website.
In an article for the Center for Corporate Reporting, which provides guidance on corporate reporting for companies in Switzerland, Germany and Austria, one of the founders of South Pole wrote that greenwishing “ensures that [a] company is seen as a climate leader in the eyes of the public, without running the risk of being accused of greenwashing.”
“After all, you did not make any binding commitments in the first place; you were only expressing your support for climate action and your wishes for a low-carbon future,” the article said.
The way forward
Industry watchers say Canada needs to move toward policies that support the transition to a net-zero economy.
Segal said the country needs to act with greater urgency, given how climate change could affect everything from people’s homes to their livelihoods and the economy.
“We’re seeing increasing climate-related disasters that affect both communities and investment,” Segal said. “Climate-aligned finance policy is the missing piece of Canada’s climate plan,” if it is to align with the country’s commitments under the Paris Agreement.
Segal pointed to Bill S-243, which would hold corporate directors to account for climate action and mandate climate action plans from financial institutions, among other things.
“Requiring the plans that support the commitment is really key in terms of transparency and accountability, and just helping ensure we move in the right direction,” she said.
Koskinen was pleased about Canada following the lead of other jurisdictions, such as Europe.
“Right now, with the new European law, if you advertise a certain ESG investment strategy, at least 80% of your assets have to follow that strategy. That’s a massive, tangible, measurable thing,” he said. “Until the passing of Bill C-59, there was no explicit law against greenwashing in Canada. It was activist groups trying to name and shame, or [the Office of Consumer Affairs] bringing cases against these companies.”
However, Koskinen said the new greenwashing regulations in Canada are “quite vague at the moment.” He said he hopes they will be clarified soon “so that companies have more certainty what is allowed and what is not.”
Barr, of Morningstar Sustainalytics, agrees Canada should look to the European Union as an example as it develops its sustainable finance policies, saying there’s a competitive reason for this as well.
“If you have this whole base of EU customers that are buying products from other businesses and they look at Canadian companies and say, ‘Oh, they’re not taking carbon seriously [so] I’d rather buy from this other company in France,’ that’s a lost opportunity for Canadian business,” he said.
But Barr and Koskinen acknowledged that moving toward a sustainable economy requires time.
Koskinen noted that Europe is less reliant on fossil fuels, whereas oil and gas are Canada’s top exports.
“It’s very difficult to decarbonize our energy system,” he said. “The economy doesn’t change overnight. The new firms are much quicker and agile to change, and some firms can change very fast, but [for] the large legacy companies, it’s going to take time.”
Barr shared a similar remark.
“Sometimes there’s criticism that the regulations aren’t strong enough, or they’re not going quick enough, but at least we’re seeing progress on them. And so it might not be ideal, it might not be perfect, but it is a journey,” he said. “It’s a bit of a marathon, not a sprint.”
Finance
German finance minister wants to scrap spousal tax splitting
Last weekend, several thousand people took to the streets in Munich to demonstrate against abortion and assisted suicide. One speaker made an extremely dramatic plea against what he called the “culture of death” that has allegedly taken hold in Germany. One sign of this, the speaker argued, was that the government is planning to abolish a regulation known as “spousal tax splitting.”
Is tax law really relevant to deep philosophical debates on the sanctity of life? It is even a matter of life and death at all? Surely we needn’t go that far? In any case, the intense political uproar surrounding the new debate on whether to abolish spousal tax splitting is notable, even by today’s standards of populist outrage.
An advantage for couples with widely divergent incomes
The row was sparked by Germany’s vice chancellor and finance minister, Lars Klingbeil, of the center-left Social Democratic Party (SPD), who said he wanted to abolish and replace the joint taxation of spouses’ income, a system that has been in place since 1958.
How exactly does spousal tax splitting work? In Germany, married couples (and since 2013, couples in civil partnerships), can choose to have their income assessed jointly by the tax authorities.
It means that the taxable income for both spouses together is halved – as if both partners had each earned an equal half of the income. Their tax liability is then determined by simply doubling the income tax due on one half.
As people who earn more pay higher taxes in Germany, this system benefits couples where one partner (and often this is still the man) earns significantly more than the other (in practice often the woman).
Costs of up to €25 billion per year
If for example one partner earns €60,000 ($70,512) a year and the other partner earns nothing, the couple will be taxed as if they earned €30,000 each. In this example, the couple would save nearly €5,800 in taxes per year compared to the amount they would owe if both partners filed their taxes separately. According to the Finance Ministry, spousal tax splitting costs the government a total of up to €25 billion annually.
Some critics have long viewed splitting as a tool to keep women out of the labor market, because the more a woman earns, the larger her tax burden becomes. Klingbeil seems to agree, arguing on ARD television in late March that the system was “out of step with the times.” The spousal splitting system reflects “a view of women and families that is completely at odds with my own,” he said.
Chancellor Merz said to be in favor of splitting
On Monday of this week, Klingbeil got some surprising support on this from Johannes Winkel, head of the youth wing of the conservative Christian Democratic Union (CDU).
“Given the demographic reality, the government should create incentives to ensure that both partners in a relationship are employed,” Winkel told the Funke Media Group. “In the future, tax relief should primarily be granted to married couples when they are facing hardships related to raising children.”
But the chancellor is a vocal skeptic of the proposal. “I am not convinced by the claim that joint filing for married couples discourages women from working,” Friedrich Merz said at a conference organized by the Frankfurter Allgemeine Zeitung newspaper. “Marriage is a relationship based on shared income and mutual support. And in a marriage, income must be treated as a joint income for tax purposes, not separately.”
Klingbeil’s alternative plan
At around 74%, the labor force participation rate for women in Germany is one of the highest in Europe, but half of them work part-time.
Klingbeil’s idea is to replace the existing system with a more flexible approach: Both partners would be able to distribute tax-free income among themselves in such a way that it minimizes their tax liability. This would allow the couple to continue enjoying a tax advantage, albeit not to the same extent as before. And whether one partner earns more than the other would become less important.
However, it remains to be seen whether Klingbeil will be able to push through his proposal. Aside from Germany, similar regulations offering tax benefits to couples exist in Poland, Luxembourg, Portugal and France.
This article was originally written in German.
Finance
Departing inspector general targets Council Office of Financial Analysis
The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.
Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.
In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.
But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”
“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.
Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.
Jim Vondruska/Jim Vondruska/For the Sun-Times
But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”
The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .
Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”
The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.
“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.
The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.
The office was created in 2014 to provide Council members with expert advice on fiscal issues.
For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.
Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.
Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.
The office was further required to produce activity reports quarterly, not just annually.
Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.
Two years ago, a bizarre standoff developed in the office.
Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.
The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.
“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.
Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.
Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.
Finance
Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant
Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments.
“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.”
In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.
After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.
“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.”
Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.
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