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Growing Concerns: Biodiversity and Greenwashing in Today's Business Landscape

Recent research conducted by RepRisk has unveiled alarming trends in corporate responsibilities towards biodiversity and greenwashing. The study highlights that the global share of companies entangled in both biodiversity and greenwashing risks has doubled over the past five years, transitioning from 3% in 2021 to a significant 6% in 2025. This influx raises questions about how companies portray their environmental commitments and the overall transparency of such claims.

Understanding Biodiversity as a Key Environmental Issue

Biodiversity has emerged as a crucial aspect of environmental responsibility, according to RepRisk's findings. Approximately 38% of all environmental risk incidents tracked over the past year were attributed to biodiversity concerns, closely followed by local pollution at 33% and waste issues at 17%. This data sheds light on the increasing recognition of biodiversity risks by the corporate sector, illustrating a shift in focus for sustainability efforts.

The Pressure for Accountability

Philipp Aeby, CEO and Co-founder of RepRisk, emphasizes that as biodiversity considerations increasingly dominate corporate agendas, public scrutiny of companies' actions intensifies. He comments, “The price of greenwashing is paid in reputation and revenue.” This statement encapsulates the growing accountability that organizations face, pressuring them to support their environmental narratives with solid data rather than vague claims.

How Greenwashing is Impacting Financial Services

The financial services sector, which includes banking and asset management, reports an uptick in greenwashing risks despite having a limited direct impact on biodiversity. In 2025, a staggering 294 firms in this sector were flagged for greenwashing risk—a 19% increase from 248 the previous year. While these institutions may influence environmental outcomes through financing and investment decisions, their own practices are under scrutiny as stakeholders demand a higher level of transparency.

Regional Trends in Greenwashing

Interestingly, RepRisk's data indicates diverging trends across different regions. While the EU has seen a steady decline in greenwashing risks since 2023, both the US and UK have experienced rising rates in the past year. In the US, greenwashing risk exposure surged to over 4% in 2023 and saw an uptick again in 2025, illustrating persistent challenges within the regulatory environment. The pattern in the UK mirrors that of the US, although at slightly lower levels, indicating a need for enhanced compliance and enforcement measures.

Recurring Risks in Specific Sectors

Some sectors demonstrate a worrying trend of recurring greenwashing risks. The aviation industry, for instance, has shown that nearly seven out of ten companies flagged for greenwashing in 2024 faced similar scrutiny again in 2025. This suggests systemic issues within the industry that may necessitate more robust regulatory oversight.

Data Methodology and Insights

RepRisk’s comprehensive approach analyzes over 2.5 million documents spanning 23 languages daily, sourced from more than 150,000 public stakeholders. By focusing on external public sources and excluding company self-disclosures, RepRisk is able to shine a light on operational risks that may otherwise go unnoticed. This methodology is pivotal in grasping the full extent of companies’ reputational risks and challenges in maintaining transparency in their environmental practices.

Conclusion: Implications for The Future of Corporate Transparency

As we move forward, the findings of RepRisk underscore an urgent need for companies to enhance transparency and accountability regarding their environmental commitments. The dual risks of biodiversity loss and greenwashing not only threaten reputations but also have significant financial implications. Businesses must adopt more honest practices and focus on meaningful progress to align their operations with sustainability expectations from consumers, investors, and regulators alike.