Greenwashing exposure is spreading beyond traditional polluters to the financial institutions, suppliers and technologies financing and driving the low-carbon transition, reveals new research.
Greenwashing risk is rising again – and broadening across the energy transition. New research from RepRisk shows the number of companies linked to greenwashing reached 1,594 in the year to June 2026, up 28% year on year.
Over the past five years, greenwashing-related incidents have increased by 112%, while scrutiny has shifted beyond traditional high-emitting sectors such as oil and gas towards the companies, technologies, projects and financial institutions financing, supplying and driving demand in the low-carbon transition. The rise marks a second consecutive annual increase, following a 12% decline in 2024.
What is changing most is where the risk sits. As capital flows towards renewable energy, transition minerals, low-carbon infrastructure and other climate solutions, environmental claims are coming under closer examination across the businesses helping to deliver the transition.
GREENWASHING RISK RISES AGAIN
The latest findings represent a notable reversal. In 2024, Fair Play Talks reported that global greenwashing risk had fallen 12% – the first decline in six years. At the time, growing regulatory pressure and greater stakeholder scrutiny appeared to be pushing companies towards greater caution in their environmental claims.
Two years later, the number of companies linked to greenwashing has risen for a second successive year. RepRisk says 1,594 companies were associated with greenwashing during the period from July 2025 to June 2026, representing a 28% annual increase. The figures suggest greenwashing has not disappeared. Instead, the risk landscape is evolving alongside the transition itself.
RepRisk defines greenwashing as environmental statements, communications or actions that do not clearly and fairly reflect the environmental performance of an organisation, product or service.
ENERGY TRANSITION BECOMES GREENWASHING’S NEW FRONTIER
Between 2022 and 2026, the combined share of environmental greenwashing linkages associated with alternative energy, industrial metals, mining, software and computer services, and utilities increased from 18% to 29%. Over the same period, the share associated with oil and gas fell from 17% to 12%, noted RepRisk.
The shift reflects where investment is now flowing. As more capital moves into renewable energy, transition minerals, low-carbon infrastructure, data centres and other climate technologies, environmental claims attached to those activities are receiving greater scrutiny.
RepRisk describes these industries collectively as transition-linked sectors because they provide much of the infrastructure and materials required for the shift to a low-carbon economy. That means greenwashing scrutiny is increasingly extending beyond companies traditionally associated with high emissions to the businesses presenting themselves as part of the solution.
FINANCIAL SERVICES SEE 40% RISE IN GREENWASHING EXPOSURE
Financial institutions sit at the centre of the changing landscape. In 2026, Financial services and banks together accounted for one-fifth of all sector linkages among companies associated with greenwashing. Financial services was the most exposed sector, with 305 companies linked to greenwashing – up 40% year on year. Another 86 banks were linked to greenwashing, representing a 23% annual increase, according to the report.
Financial institutions can face greenwashing risk through both their own activities and the organisations and projects they finance, invest in or underwrite. That creates a particular challenge for banks, asset managers and asset owners attempting to direct capital towards transition opportunities while ensuring environmental claims withstand scrutiny.
INFORMED CAPITAL ALLOCATION
“The transition depends on informed capital allocation. As investments continue to accelerate, banks, asset managers, and asset owners must be able to cut through greenwashing,” said Philipp Aeby, CEO and Co-founder of RepRisk. “High-quality data that is relevant, accurate, and auditable enables financial institutions to identify emerging risks and ensure that capital supports credible transition efforts and long-term value creation.”
The findings reinforce concerns previously highlighted about the financial sector’s role in the transition. In 2025, Fair Play Talks reported on the phenomenon described as “financial cakeism”, as banks and investors attempted to reconcile climate commitments with short-term returns and continued exposure to high-carbon activities.
That research highlighted the difficult balancing act facing financial institutions as they try to support transition technologies while managing both physical and transition risks. RepRisk’s latest findings suggest greenwashing risk is becoming another part of that equation.
CLIMATE AND ENERGY RISKS RISE UP THE FINANCIAL AGENDA
The issue is becoming increasingly material for financial institutions. In separate 2026 RepRisk research, financial-sector executives ranked climate- and energy-transition issues as the second most material business-conduct risk they expect to face over the next three years, behind only AI-related risks.
That underlines why the quality of environmental data matters. As financial institutions allocate more capital to renewable energy, transition minerals, infrastructure and technologies presented as climate solutions, they need to distinguish credible transition activity from environmental claims that may be incomplete, exaggerated or misleading.
BIODIVERSITY OVERTAKES CLIMATE
The nature of greenwashing concerns is also broadening. Between 2024 and 2026, greenwashing linkages relating to ecosystems and biodiversity nearly doubled from 162 to 300.
By comparison, linkages involving climate change and emissions remained broadly flat, edging up from 272 to 275, noted RepRisk. As a result, biodiversity overtook climate change and emissions as the leading environmental issue connected to greenwashing risk for the first time in five years.
That shift reflects a wider expansion in the environmental issues businesses are increasingly expected to understand. Companies now face scrutiny not only over carbon emissions and net-zero claims, but also biodiversity loss, ecosystems, land use, deforestation, pollution and wider environmental impacts.
Previous studies have highlighted how emerging issues such as nanoplastics and wider contamination risks are widening expectations around responsible environmental management. That analysis argued that the most credible approach is neither overstating environmental progress nor avoiding difficult issues, but communicating transparently and grounding claims in evidence.
FROM GREENWASHING TO GREENHUSHING
Companies face another dilemma. Heightened scrutiny can discourage misleading environmental claims, but it can also encourage businesses to stop communicating about legitimate sustainability activity altogether.
Previous research found that 58% of major US companies were under-promoting their ESG progress, creating the parallel risk of greenhushing. Only 2% of companies in that study were found to be over-promoting their ESG progress, while many disclosed considerably more factual sustainability information than they communicated externally.
The challenge for businesses therefore is not simply to communicate less. It is to ensure environmental claims are specific, substantiated and supported by credible data.
SUSTAINABILITY AMBITION REMAINS HIGH
The rise in greenwashing risk is also occurring at a time when companies continue to increase their focus on sustainability. Fair Play Talks previously reported that nine in 10 global CEOs believe the business case for sustainability is stronger than it was five years earlier. That study found 99% of companies planned to maintain or expand their sustainability commitments, while 95% of CEOs identified compliance as a priority.
More recently, research revealed that nine in 10 sustainability professionals expect their organisations’ ambitions to hold steady, increase or become more strategically targeted despite economic and regulatory pressure. The challenge is therefore shifting from whether businesses commit to sustainability towards whether those commitments can be demonstrated credibly.
CLIMATE TARGETS ARE EASIER TO SET THAN DELIVER
There is already evidence of a gap between environmental ambition and measurable outcomes. Earlier this year, research revealed that 84% of S&P 500 companies had disclosed at least one climate target, yet many were still recording flat or rising emissions. For example, 58% of companies with Scope 1 targets had recorded flat or rising direct emissions since 2021.
That execution gap creates another potential source of scrutiny. Making ambitious sustainability commitments is increasingly common. Demonstrating that those commitments are delivering measurable outcomes is considerably harder.
WHAT BUSINESSES SHOULD DO
RepRisk’s findings suggest greenwashing risk management increasingly needs to extend well beyond marketing and communications teams.
1. Substantiate environmental claims
Companies need evidence behind claims relating to net zero, renewable energy, biodiversity, transition technologies and environmental benefits. Claims should be precise enough to withstand investor, regulator and stakeholder scrutiny.
2. Scrutinise transition claims as closely as fossil-fuel claims
Renewable energy, mining, transition minerals and low-carbon infrastructure should not automatically be regarded as low-risk simply because they support decarbonisation. Projects can still carry significant environmental and social impacts.
3. Look beyond carbon
The rise of biodiversity-related greenwashing shows organisations need to understand environmental impacts beyond greenhouse-gas emissions. Land use, ecosystems, water, pollution and biodiversity increasingly form part of the risk landscape.
4. Strengthen financial due diligence
Banks, investors and asset managers need credible data on both their own environmental claims and those made by companies and projects they finance. That is particularly important as transition investment grows.
5. Avoid greenhushing
The answer to greenwashing risk is not silence. Companies should communicate legitimate progress while being transparent about limitations, trade-offs and areas where targets have not yet been achieved.
6. Align communications with performance
Sustainability teams, communications teams, finance, risk and operational leaders should work from the same evidence base. The greater the gap between environmental claims and measurable performance, the greater the reputational and regulatory risk.
GREENWASHING IS MOVING WITH THE TRANSITION
The latest findings suggest greenwashing scrutiny is following the movement of capital. Oil and gas remain important. But as investment shifts towards the infrastructure, technologies, minerals and financial products supporting decarbonisation, scrutiny is shifting with it.
Transition-linked sectors now account for 29% of environmental greenwashing linkages, compared with 18% four years earlier. Financial services companies linked to greenwashing have increased 40% in a single year.
Biodiversity has overtaken climate as the leading environmental issue connected to greenwashing risk. And the total number of companies linked to greenwashing has risen to 1,594. The implication is not that the energy transition itself is becoming less credible. Rather, the transition is becoming more economically important, and therefore more closely scrutinised.
For businesses and financial institutions, the emerging challenge is clear: credible transition claims will increasingly need credible evidence behind them.
Read RepRisk’s latest annual report here.
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