Greenwashing is a generic term used for breaches of various
legal provisions ranging from unfair competition, securities rules and
unethical advertising to wrong corporate disclosure. This paper focuses on
corporate disclosure rules with a focus on banks as deposit taking
institutions. Against the background of the large needs for private sources of
sustainability financing in order to meet the objectives of the European
Climate Law (ECL), the EU sustainability corporate reporting and due diligence
as well as the EU Taxonomy constitute an ambitious legislative framework aimed at
establishing harmonized and comparable sustainability corporate data among
firms and across time. This framework is a cornerstone for combating
greenwashing because it raises the responsibility for inaccurate disclosure.
The success of the regulatory framework will heavily rely on its credible
implementation, including penalties, that will contribute to anchoring the
expectations and conditioning the behaviour of economic agents. The paper
concludes that this regulatory framework is far reaching and effective. The
paper also formulates a number of recommendations for the way forward and sets
out that any future legal framework for greenwashing should be linked to the
corporate sustainability disclosure framework.