ACCA Applied Knowledge · Business and Technology · Sustainable business practices
Brightway plc's board wants to show accountability for its environmental impact. It states in its report that it is 'committed to a greener future' but gives no targets, measures or data. Which criticism is most appropriate?
The most appropriate criticism is greenwashing. The company claims commitment to the environment but provides no targets, measures or data, so stakeholders cannot verify or hold it accountable. Genuine accountability requires specific, measurable and comparable disclosures, ideally supported by independent assurance.
- AThe report is guilty of greenwashing because claims are unsupported by measurable evidenceCorrect
- BThe report breaches the going concern concept
- CThe report understates liabilities in the statement of financial position
- DThe report fails the materiality test for financial statements
Explanation
Vague environmental claims with no targets or data create a misleading impression of responsibility, which is greenwashing. Going concern, liabilities and financial statement materiality are not the issue in a narrative sustainability statement.
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