This is the first decline in these kinds of instances in six years, mostly due to tighter regulations and a growing practice known as "greenhushing," in which businesses downplay overt sustainability promises in order to appease stakeholders such as investors, customers, and government officials.

The intensity and quantity of high-impact greenwashing incidents have increased by 30% in spite of this general decline, highlighting the continued difficulties in this field.

"While regulators have successfully pushed forward legislation to deter greenwashing, the risk will keep evolving as new forms emerge, leaving companies open to reputational damage which impacts their bottom line," said Dr. Philipp Aeby, CEO and co-founder of RepRisk, emphasizing the dynamic nature of greenwashing risks. Corporations typically use narratives to justify greenwashing. Investors and businesses should rely on what other sources disclose about these claims in order to find it.

The research underscores a noteworthy transition, namely in the Banking and Financial Services industry, whereby there was a 20% decrease in instances of greenwashing from 2023 to 2024. This was in contrast to a 70% surge in climate-related greenwashing between 2022 and 2023. This sectoral change suggests a robust reaction to regulatory frameworks, particularly in the EU, where extensive laws such as the Green Claims Directive have played a key role in requiring businesses to provide concrete proof to support their environmental claims.

The United States, on the other hand, responded inconsistently, with instances of "greenwashing" reaching a high in 2022 and then somewhat declining after that. This fluctuation is explained by the growing political significance of ESG elements in the area, which affects how businesses present their sustainability credentials in response to various investor and political demands.