Does Omission Equal Greenwashing?

What message is your ESG disclosure really sending?

8/27/20254 min read

Let’s start with the good news. The rise in voluntary ESG reporting, even in today’s skeptical, often hostile environment, is a clear signal: organizations are tracking emissions, setting goals, publishing strategies, and building systems to measure progress. That’s meaningful.

It shows that, despite growing backlash against ESG, many leaders still see value in investing time and resources into it. Yes, for some it’s still a box-ticking exercise. But even that signals momentum, and where there’s momentum, there’s potential. When done right, ESG isn’t a burden. It’s a lever for real innovation, long-term value, and risk management.

But here’s the shift that needs to happen: voluntary reporting doesn’t mean selective storytelling.

If companies highlight wins while burying the tradeoffs, that’s not transparency. That’s PR. And when ESG reports start looking more like marketing brochures than accountability documents, credibility erodes. Fast.

The Hidden Cost of Half-Truths

Unlike financial reporting, ESG disclosures aren’t always regulated or audited. Even with frameworks like GRI, TCFD, or ISSB, there’s wide latitude to pick and choose what gets shared.

Many financial institutions proudly tout ESG funds and green bonds. But where’s the detail on financed emissions? Or exposure to fossil fuels and toxic industries? Often missing.

That’s not a minor oversight. It’s a material omission. And when the feel-good language overshadows the full truth, it edges dangerously close to greenwashing.

A Case in Point: Oil & Gas

Take one major oil & gas company’s 2024 sustainability report. They shared:

Net-zero Scope 1 & 2 emissions by 2050
“Near-zero” methane intensity
5–10% carbon intensity reduction by 2030

All sounds good, right? What’s left out?

Their Scope 3 emissions, those from customers burning oil and gas, increased to 315 million metric tons CO₂e in 2023, 91% of their total footprint. And they’ve now “retired” publishing Scope 3 emissions.

Production cut targets weakened from 40% to just 25% by 2030.
Operational emissions increased due to more fossil fuel extraction and acquisitions.

Let’s be real. Yes, many oil & gas companies have improved operations, less methane leakage, more efficiency, some cleaner tech. Those steps matter. However, you can’t truly be part of the climate solution while continuing to drill, extract, and sell the fuels that cause it. No matter how efficiently a company operates its rigs, pipelines, and platforms, the product itself, fossil fuels, is the problem.

Fossil fuel combustion accounts for over 75% of global greenhouse gas emissions, according to the UN* .
Even if Scope 1 & 2 emissions are near zero, Scope 3 emissions remain massive, and they’re the driving force behind planetary heating.

A low-emission oil rig is like a low-tar cigarette. It may reduce some risks, but the core product still kills. Oil and gas companies can’t claim climate leadership unless they’re phasing down production and transitioning their portfolios to clean energy at scale. Not balancing fossil expansion with renewables. Not offsetting. Phasing out.

That’s the disconnect at the heart of many ESG disclosures today: the numbers improve, but the business model still accelerates the crisis.

It’s Not About Perfection. It’s About Accountability.

The goal isn’t to dismiss ambition. It’s to demand full accountability. Real sustainability reporting includes the messy parts too. And yes, some frameworks still leave room for interpretation, but there are clearer expectations now, more so than ever before.

For example, under GRI’s 2023 Universal Standards, financial institutions should be disclosing:

GRI 201 (Economic Performance)
GRI 302 (Energy)
GRI 305 (Emissions)
GRI 307 (Environmental Compliance)
GRI 308 (Supplier Environmental Assessment)
GRI 410 (Rights of Indigenous Peoples)

GRI’s upcoming Banking Sector Standard (2025) will go further:

Disclose financed emissions
Report loans to fossil fuel industries
Align with Paris-compliant investment strategies

And it’s not just for financial institutions. Manufacturers are expected to report on toxic chemical use, water pollution, waste, and supply chain emissions. In food and agriculture, failing to include data on pesticide use, water consumption, deforestation, or soil degradation, while simultaneously making “sustainable farming” claims, isn’t just incomplete. It’s misleading.

Greenwashing by Omission: A Gut Check for Leaders

Ask yourself:

Would this missing data change how stakeholders view our performance?
Are we making climate claims while hiding contradictory facts?
Are we omitting disclosures in high-impact areas?
Are we skipping entire categories required by frameworks like GRI, SASB, or TCFD?
Would investors or regulators feel misled if they saw the full picture?

If the answer to two or more is “yes,” your report isn’t just incomplete. It might be misleading.

Want credibility? Go beyond the minimum:

GRI Sector Standards – Especially for financial services, these are fast becoming table stakes.
TCFD – Integrate scenario planning, risk governance, and board oversight.
SASB Metrics – Bring the investor lens of materiality.
Double Materiality (CSRD/ESRS) – Show how climate affects you and how you affect the planet.
Project Drawdown – Benchmark against science-based solutions for real impact.

For the Public: How to Read Between the Lines

You don’t need to be an ESG expert to spot red flags. Think of deciphering ESG reports like nutrition labels. You don’t have to know every chemical, you just have to know enough to know that a long list of ingredients that you can’t pronounce is not healthy, even with some “healthy” marketing claims on the front of the package. Here are some tools to make it easier:

Step 1: Use Materiality Maps

These websites lists universal standards (that apply to all companies), topic standards (e.g., emissions, waste, labor rights) and sector standards (e.g., banking, agriculture, energy) to help us all know what we should be looking for.

If a company skips several topics that are considered material (important) for its industry, that’s a red flag.

Step 2: Check Independent Ratings

See what impartial third-party evaluators say. MSCI, Sustainalytics, and CDP provide ratings and scores to compare companies to their peers. Look for notes like “Does not disclose Scope 3 emissions” or “No climate risk assessment.” These are gaps that matter.

Step 3: Ask These Five Questions

Does the report include Scope 3 emissions?
Does it discuss challenges, not just wins?
Are climate risks quantified with real numbers?
Are all material topics addressed?
Are financed or supply chain emissions mentioned (if relevant)?

If not, you're reading a marketing tool, not an ESG disclosure report.

Voluntary ESG reporting is a step forward. But omission isn’t harmless, it’s a risk. And increasingly, it’s a reputational one. Because eventually, people will catch on. In today’s environment of scrutiny, stakeholder pressure, and growing regulation, a glossy ESG report full of scenic photography and green-speak won’t cut it. It won’t build trust. It won’t attract capital. And it certainly won’t shield your brand.

If your sustainability story can’t stand up to scrutiny, it’s not a story worth telling.

The future belongs to companies that choose truth over polish. Clarity over comfort. Progress over perfection. So report it all. Even the hard stuff. Especially the hard stuff. That’s true leadership.

*https://www.un.org/en/climatechange/science/causes-effects-climate-change