Defined as a misleading practice in which companies and governments disclose false or unsubstantiated information about their environmental benefits, greenwashing is used to create a false image of sustainability. Terms such as “eco-friendly,” “green,” or “sustainable” are often used in advertising to attract consumers and investors, even when the company’s actions do not correspond to such claims. This strategy seeks to capitalize on the growing demand for environmental, social, and governance (ESG) criteria, but in reality, it masks negative impacts or omits essential information.
Studies show that cases of greenwashing have increased globally. Between 2022 and 2023, one-quarter of climate-related ESG risks were associated with this practice. In addition to misleading marketing, the issue appears in sustainability reports, where data can be distorted, incompletely disclosed, or omitted. According to research conducted by PwC, in Brazil, 90% of investors believe that these reports contain unverified information. The pressure to adhere to ESG standards has led some companies to overstate their initiatives, communicating actions without any concrete results.
Risks and consequences
Greenwashing generates market distrust and may lead to legal consequences, such as fines and lawsuits for fraud or corruption. Companies that disclose ambitious targets—such as decarbonization—without explaining how they will be achieved, or that present legal obligations as voluntary actions, are subject to reputational and financial damage. The lack of transparency and clear regulation exacerbates the problem, demanding greater oversight and stricter disclosure standards.
To prevent greenwashing, it is essential that companies adopt robust corporate governance, ensuring transparency and compliance with current regulations and alignment with good ESG practices. In Brazil, the Securities and Exchange Commission (CVM) Resolution 193/2023 mandates that, beginning in 2026, publicly listed companies must follow international sustainability reporting standards.
In practice, companies will increasingly need to integrate their communications, compliance, and sustainability departments to ensure technical and regulatory conformity in their disclosures. This highlights the fundamental role of compliance in combating greenwashing and in ensuring that a company is genuinely committed to its ESG goals. In addition to ensuring that laws and regulations are properly followed, compliance must also safeguard reputation and ensure ethical and trustworthy conduct internally and externally.
Combating greenwashing not only strengthens organizational credibility but also contributes to a more ethical and sustainable market. Additionally, initiatives such as capacity building and partnerships with regulatory bodies are key to promoting the adoption of ESG criteria. According to MRV’s Director of GRC and Privacy, Alex de Souza Medeiros, integrity professionals play a strategic role in promoting transparency, ensuring consistency between actions and public commitments, and monitoring the accuracy of disclosed information. “By working at the intersection of ethics, compliance, and communication, these professionals help mitigate reputational risks, strengthen governance, and consolidate an organizational culture committed to authentic and verifiable ESG practices. Therefore, combating greenwashing is not just a regulatory or moral obligation—it is an opportunity to differentiate the company genuinely and responsibly,” he states.
Corporate governance systems play a preventive and active role with regard to transparency and information disclosure. They ensure that all publications comply with regulatory requirements. Therefore, they connect effective environmental protection initiatives with the promotion of integrity, transparency, and ethics. Integrity encompasses all business efforts toward the ESG agenda, and stakeholders are increasingly engaged on this topic—empowered to verify any published data or information.
Aegea’s Director of Integrity, Ana Paula Carracedo, highlights the importance of integrity functions—which, in her view, must also ensure that the ESG commitments made by organizations translate into effective practices. “This involves implementing due diligence processes, specific contractual clauses, and monitoring mechanisms that ensure, for example, the absence of slave-like labor in the supply chain, as well as partner alignment with current environmental and social standards. These controls have proven critical during investigations led by regulatory bodies, reinforcing the relevance of the compliance function in the effectiveness of ESG policies,” she explains.
The role of the UN Global Compact in Brazil
In this context, the UN Global Compact Network Brazil operates the Anti-Corruption Action Platform, which currently gathers more than 370 organizations that develop projects, promote constructive dialogue, lead engagement actions, disseminate knowledge and best practices, and strengthen compliance, risk management, governance, and transparency strategies. It is the largest platform dedicated to this topic across all Global Compact networks.
The Platform’s work is structured through Project Committees, in which participating companies lead discussions on whistleblowing channels and investigations, foundations of compliance programs, and academic studies on the promotion of integrity in the corporate environment. In parallel, the Platform also seeks to engage sectors more exposed to corruption risks through two Collective Action initiatives focused on agribusiness and the electric energy sector.
Transparency and integrity
The Anti-Corruption Action Platform also leads two additional initiatives. The first is the Transparency 100% Movement, an unprecedented and ambitious initiative that encourages organizations to strengthen their transparency mechanisms through five goals based on best corporate practices. With around 80 participants, it is considered the largest initiative promoting corporate transparency in Brazil.
The second is its role as the official representative of the Alliance for Integrity in Brazil—a global initiative developed by the German Agency for International Cooperation (GIZ), aimed at strengthening integrity and combating corruption in business.
Toward COP30
Recognizing the importance of integrating corporate integrity and anti-corruption efforts within the climate agenda, the UN Global Compact – Network Brazil included a cross-sector debate on greenwashing within its UN Global Compact Towards COP30 program. Led by the Action against Corruption Platform, the initiative brought compliance professionals into the COP30 dialogue through the exchange of best practices on transparency and integrity; support for companies in communicating their commitments to the Sustainable Development Goals (SDGs); and alignment of corporate communication with the standards established by the International Sustainability Standards Board (ISSB) and the CVM, among others.
According to the Network’s Anti-Corruption Senior Manager, Chantal Castro, this approach reflects not only Brazil’s prioritization of SDG 16 but also the strong engagement of companies with the topic. “In a year when Brazil hosts the COP, developing an initiative that combines transparent communication and the integrity of environmental reporting by Brazilian companies seemed essential—and once again, the level of corporate interest was remarkable,” she
6 CONAR. “Conar Aprova Regras Éticas Para Coibir Greenwashing Na Publicidade”, 27 de Outubro de 2025. Disponível em: http://www.conar.org.br/index.php?noticias&id=1213.
said. Throughout 2025, several actions were carried out under this project, including the publication of thematic reports, the hosting of webinars, and training activities offered to Network Brazil participant companies.
The project is guided by the following UN Global Compact Universal Principles and Sustainable Development Goals (SDGs):
SDGs:
ake urgent action to combat climate change and its impacts
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Developmen
Principles:
- 7: Businesses should support a precautionary approach to environmental challenges;
- 8: Undertake initiatives to promote greater environmental responsibility;
- 10: Businesses should work against corruption in all its forms, including extortion and bribery.