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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Green Initiatives

Kaveri Steels Ltd claims in its brochure that its new product line is 'fully eco-friendly', but it has no data, certification or measurable targets, and its plants' emissions have actually increased. A director asks the Company Secretary how this should be viewed. What is the most accurate response?

This is greenwashing. The company makes an environmental claim without data, certification or targets while its emissions are rising, so stakeholders are misled. A genuine green initiative requires measurable, verifiable action, and the board should ensure public claims are substantiated.

  1. AIt is greenwashing, as it makes unsubstantiated environmental claims that mislead stakeholdersCorrect
  2. BIt is a valid green initiative because the claim was made voluntarily
  3. CIt is acceptable because brochures are outside governance oversight
  4. DIt is a CSR activity under Schedule VII

Explanation

Greenwashing means projecting a misleading environmental image without evidence or real performance. The rise in emissions and absence of data contradict the claim. Voluntariness does not make a claim genuine, and marketing material is still subject to board oversight and disclosure integrity.

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