Green Finance vs Greenwashing Challenges to the Ecological Transformation

Purpose: The process of ecological transformation of the economy and society is ongoing. It should be emphasized that it is one of the key processes of our civilization. The aim of this paper is to present and analyze the concepts of Green Finance, with particular focus on Greenwashing. Attention is drawn to the fact that Greenwashing constitutes a significant risk to the scope, pace, and, above all, the quality of ecological transformation. However, efforts to combat it within the EU are being undertaken through the introduction of successive regulatory measures. Design/Methodology/Approach: The following research methods were used to prepare this article: analysis of the literature of the subject, analysis of legal acts, desk research. Findings: The risk of Greenwashing is underestimated in the financial market. At the same time, the scope of recent legal changes concerning Green Finance and Greenwashing in European Union legislation was called into question. The newly introduced regulations are considered overly burdensome for business entities. Practical Implications: It was recommended to continue promoting ecological transformation within society and the economy, with particular emphasis on addressing the risk known as Greenwashing. A return to the discussion on the level of detail and complexity of EU legal regulations – both in the area of Greenwashing and the broader regulatory framework related to the New Green Deal – was also recommended. Originality/value: This study presents original definitions of the concepts of Green Finance and Greenwashing, along with own classification of Greenwashing types. It further emphasizes that overregulation may hinder the ecological transition. These contributions add to the novelty and academic value of the publication.