The term "greenwashing" was originally coined in the 1980s. However, with renewed focus on global warming, its use has become prevalent in recent years.

At the British Property Federation Annual Conference (June 2022), Sarah Breeden (Bank of England) highlighted the risks associated with greenwashing. She said that there is a "wall of capital" wanting to invest in sustainability but it is difficult for investors to differentiate between genuine opportunities and inflated claims.

It seems, however, that the risk no longer lies heaviest with investors. At the end of May, DWS's Frankfurt office was raided as part of an investigation into greenwashing. As reported by the Financial Times, it is expected that this will be the start of a tidal wave of litigation on the subject in multiple jurisdictions. Whilst vocalising green credentials has been seen as a way to attract consumers and capital, it could now land businesses in trouble if they do not have the evidence to substantiate their claims.

With the path to net zero far from clear, it will be interesting to see how such litigation progresses. Maintaining a balance of interests is crucial, but there is a risk that the possibility of a claim could see businesses slow down with their innovation and become more tentative in their ESG reporting.