ACCA Applied Knowledge · Business and Technology · Sustainable business practices
A clothing retailer publishes glowing claims about its ethical sourcing, but its suppliers use poor labour conditions that management knows about. What is the term for this practice of misleading the public about ethical or environmental credentials?
The practice is greenwashing: making misleading or unsupported claims about ethical, social or environmental performance to create a falsely positive public image. It damages trust and may breach advertising or consumer rules, because actual practices do not match the claims made.
- AGreenwashingCorrect
- BWhistleblowing
- CInsider dealing
- DMoney laundering
Explanation
Greenwashing (or more broadly, misrepresenting responsible credentials) is presenting a misleadingly positive image of ethical or environmental performance. Whistleblowing is reporting wrongdoing, insider dealing is trading on non-public price-sensitive information, and money laundering concerns disguising criminal proceeds.
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