Greenwashing might sound clean, but it’s actually quite dirty. It’s basically the thing that companies/funds do to make something seem sustainable, just to make you buy it. Not only is this a crummy thing to get sucked into, it also prevents your money from reaching the opportunities that actually deserve funding. 

  • Here’s the dictionary definition (so to speak): Greenwashing is when a company or organization spends more time and money on marketing themselves as environmentally friendly than on minimizing their environmental impact. It is a deceitful advertising gimmick intended to mislead consumers who prefer to buy goods and services from environmentally conscious brands.

So how do you know if you’re being taken for a ride? I wish there was an easy answer, but there are a few hacks to minimize the likelihood that your advisor/provider isn’t giving you the full story:

  • Fufu language: Words or terms with no clear meaning (i.e., “responsible”)
  • Suggestive imagery: Images that give an (unjustified) green impression (e.g., flowers blooming from a pile of money)
  • “Best-in-class” : Effectively saying that they are slightly greener than the rest, even if the rest are nothing to write home about.
  • Confusing terminology: Jargon and wording that only a financial professional could check or understand (“the sharp ratio is creating risk-adjusted alpha and beta that are off the charts!“)
  • No proof: A claim that could be accurate but has no evidence to back it up (look for third-party certification on any/all claims that are material to your decision making)