Sustainability reporting has moved from the margins to the mainstream. Boards, investors and regulators now treat environmental and broader sustainability disclosures with the same seriousness once reserved for financial statements. But as the volume and visibility of those disclosures grows, so does the risk that claims made are exaggerated, poorly evidenced or simply incomplete. Greenwashing, whether deliberate or accidental, has become one of the most pressing integrity challenges facing the global business community, and Chartered Accountants are in a uniquely strong position to address it.
A briefing paper recently published by Accountancy Europe, with an EU focus but wider relevance, examines how different actors across the corporate ecosystem share responsibility for preventing misleading sustainability claims. The Institute of Chartered Accountants of Scotland has explored those findings in the context of the UK regulatory landscape, drawing out implications that resonate well beyond any single jurisdiction.
The global dimension matters here. Whether a company operates in London, Singapore, Johannesburg or Auckland, the structural risks are largely the same. Sustainability reporting frameworks are less mature than their financial counterparts. Data collection processes are still being established. Internal controls designed to verify non-financial information are inconsistent. These conditions create fertile ground for claims that outpace the evidence behind them, not always through bad intent, but through fragmented governance and unclear accountability.
Greenwashing does not confine itself to formal sustainability reports. It surfaces in marketing copy, investor presentations, product labelling and corporate websites. Vague language such as “eco-friendly” or “net zero by 2050”, unsupported by credible transition plans, is one common form. Selective disclosure, presenting favourable metrics while omitting inconvenient ones, is another. The breadth of where these claims can appear means that responsibility for managing the risk cannot sit with one team or one function.
This is precisely where the skills of the Chartered Accountant become essential. The discipline that the profession applies to financial reporting, professional scepticism, rigorous evidence standards, structured governance, independent challenge, translates directly to the sustainability reporting space. Chartered Accountants in CFO, internal audit and assurance roles are particularly well placed to apply those disciplines to sustainability information, ensuring it meets comparable standards of reliability to the financial data that sits alongside it.
A useful framework for organising that effort is the three lines of defence model, already familiar to many in the profession. At the first line, executive leadership, including the CFO, sets a culture of accuracy and embeds robust processes for capturing, verifying and disclosing sustainability data. The second line, risk, compliance and internal control functions, monitors consistency between what is reported and what the organisation actually does. The third line, internal audit and the audit committee, provides independent assurance over the effectiveness of the whole system. When these three lines operate in coordination, organisations are far better equipped to identify and address gaps before claims reach external audiences.
Regulatory consequences for getting this wrong are significant and growing. In the UK, the Competition and Markets Authority can impose penalties of up to ten percent of global turnover for breaches of consumer protection law related to environmental claims. The Financial Conduct Authority’s Anti-Greenwashing Rule, introduced in 2024, is expected to generate enforcement activity as it beds in. The Advertising Standards Authority has already acted against misleading green claims in advertising. Comparable regulatory frameworks are being developed or tightened across the EU, Asia-Pacific and beyond, meaning that for multinational organisations, the compliance challenge is increasingly cross-border.
For the global Chartered Accountancy profession, this convergence of regulatory pressure, stakeholder demand and reporting complexity represents both a challenge and an opportunity. The technical skills, ethical grounding and governance expertise that Chartered Accountants bring are precisely what organisations need as they work to make their sustainability communications credible and defensible.
Chartered Accountants Worldwide believes that the strength of the profession lies in its commitment to integrity in all forms of reporting. As sustainability information becomes ever more consequential to capital allocation, strategic planning and public trust, Chartered Accountants working across sectors and geographies have a clear role in raising the standard of what organisations say, and ensuring it genuinely reflects what they do. That is not a peripheral contribution. It sits at the heart of what the profession exists to deliver.
