How Strategic Communications Approach Risk Communications Concerning ESG Related Crises

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Greenwashing is the practice of spreading false information or fabricating stories about how an organization is conserving natural resources or that its product or service is environmentally friendly (Netto et al., 2020; Yu et al., 2020). Several institutions have come under scrutiny for their involvement in such fraud. This action inevitably undermines the public’s trust in that brand. Greenwashing is also practiced by financial institutions. When confronted with this quandary, financial institutions must engage in a transparent discussion about the nuances of their environmental, social, and governance (ESG) activities.
In the increasingly intricate financial environment, many activities have been undertaken within such institutions in response to the high stakes for environmental sustainability—however, the problem of greenwashing shadows them, ready to erode stakeholder confidence. Financial institutions must adopt and publicize sustainable practices. This can only be accomplished by employing robust communication strategies. Every word of every environmental claim must be evaluated considering solid evidence and information. Indeed, from this vantage point, a multipronged approach is unavoidable; guidelines should be well-defined and disclosed, and an introduction for stakeholder dialogue should be provided, with independent systems of verification introduced, such as crisis management frameworks or corporate social responsibility (CSR) (Coombs & Holladay, 2015).
To prevent greenwashing challenges, financial organizations can employ a variety of communication tactics. The issue