What is greenwashing?

Prepare for the Fundamentals of Sustainability Accounting Test. Hone skills with real exam questions, detailed explanations, and strategic tips for success. Make the most of every practice attempt!

Greenwashing refers to the practice in which a company or organization gives a misleading impression regarding the environmental benefits of a product, service, or the organization's overall stance towards environmental responsibility. This often involves exaggerating or fabricating claims about the environmental impacts or benefits associated with their operations or products to attract consumers who prioritize sustainability.

In this context, the correct answer accurately captures the essence of greenwashing, highlighting how it creates a facade of environmental consciousness without any substantial action or genuine commitment to sustainability. This phenomenon can lead consumers to believe they are making eco-friendly choices when, in fact, the company may be continuing practices that harm the environment.

When evaluating the other options, it's clear that practices aimed at reducing carbon footprints, methods of sustainable sourcing, and regulatory compliance processes all represent genuine efforts towards sustainability and environmental responsibility, contrasting sharply with the deceptive nature of greenwashing.

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