Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)

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Greenwashing in ESG Investment Strategies: Implications and Solutions for Financial Markets

Authors
Yifan Yu1, *
1Business School, The University of Sydney, Sydney, 2050, Australia
*Corresponding author. Email: yifan.yu@sydney.edu.au
Corresponding Author
Yifan Yu
Available Online 3 July 2025.
DOI
10.2991/978-94-6463-748-9_31How to use a DOI?
Keywords
ESG; Greenwashing; Sustainable finance; Investment
Abstract

Sustainability is transforming the financial market from traditional risk-return focus to valuing environmental, social, and governance (ESG) factors when making investment decisions. However, greenwashing has been detected as a common practice in this process, where financial companies tend to exaggerate or misrepresent their ESG practices. This behaviour undermines the integrity of financial markets and reduces investors’ confidence towards sustainability development. This paper examines the first greenwashing case brought by the Australian Securities and Investments Commission (ASIC) against Mercer Superannuation (Australia) Limited. Through analysing the case with literature review and industry data support, the paper identifies three main reasons for greenwashing, including ambiguity in sustainability concepts and disclosures, inadequate internal governance, and insufficient regulatory oversights. To address these challenges, it is recommended to improve the roles of board of directors, leverage artificial intelligence, and strengthen regulatory framework. The combination of both internal and external endeavours contributes to the transparency, accountability, and consistency in ESG disclosures, which can help improve investors’ trust and promote sustainable development of financial market in the long-term.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
3 July 2025
ISBN
978-94-6463-748-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-748-9_31How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yifan Yu
PY  - 2025
DA  - 2025/07/03
TI  - Greenwashing in ESG Investment Strategies: Implications and Solutions for Financial Markets
BT  - Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
PB  - Atlantis Press
SP  - 274
EP  - 282
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-748-9_31
DO  - 10.2991/978-94-6463-748-9_31
ID  - Yu2025
ER  -