Unmasking Greenwashing in Finance: A PROMETHEE II-Based Evaluation of ESG Disclosure and Green Accounting Alignment

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:This paper offers a novel multi-criteria decision-making framework for quantifying greenwashing risk, useful for further methodological development.

🏢実務担当者:Financial institutions can use the Greenwashing Risk Index to self-assess and improve the substance behind their ESG disclosures.

🏛政策担当者:Regulators can adopt this evidence-based tool to identify institutions at risk of greenwashing and to enhance disclosure supervision.

This study examines the degree of alignment between the actual environmental performance and the ESG disclosures of 365 listed financial institutions in Europe for the fiscal year 2024. Although ESG reporting has become a standard practice in the financial sector, there are still concerns that the quality of the disclosure may not accurately reflect substantive environmental action, which increases the risk of greenwashing. This study addresses this issue by incorporating both ESG disclosure indicators and green accounting metrics into a multi-criteria decision-making framework. This framework is supported by entropy-based weighting to assure objectivity in criterion importance, as outlined in the PROMETHEE II method. The Greenwashing Risk Index (GWI) is a groundbreaking innovation that quantifies the discrepancy between an institution’s classification based on ESG transparency and its performance in green accounting indicators, including environmental penalties, provisions, and resource usage. The results indicate that there is a substantial degree of variation in the performance of ESGs among institutions, with a significant portion of them exhibiting high disclosure scores but insufficient environmental substance. These discrepancies indicate that reputational sustainability may not be operationally sustained. The results have significant implications for regulatory supervision, sustainable finance policy, and ESG rating methodologies. The framework that has been proposed provides a replicable, evidence-based tool for identifying institutions that are at risk of greenwashing and facilitates the implementation of more accountable ESG evaluation practices in the financial sector.