Greenwashing Isn’t Just Misleading — It’s Economically Damaging
- Post by: Randy Muñoz
- November 6, 2025
- Comments off
New research from the University of Zurich by Markus Leippold, Chiara Colesanti Senni, and EClim member Saeid Vaghefi reveals that greenwashing is not just a reputational issue — it carries a macroeconomic cost that may exceed 2% of GDP annually.
🔍 Key findings from the paper:
- Greenwashing degrades information quality and erodes public trust, creating a self-reinforcing loop of misinformation.
- The Social Cost of Greenwashing (SCG) includes wasted resources, manipulation costs, and the collapse of reliable information systems.
- Once trust is lost, rebuilding it is costly and slow.
- Paradoxically, competition among companies can worsen the problem, as influence spending escalates.
- This helps explain why fossil fuels remain dominant even when renewables are cheaper—distorted information is keeping markets stuck.
💡 Policy implication: Integrity of information is as vital as carbon pricing to enable an effective energy transition.
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