November 2026
As investment in the energy transition grows, so does scrutiny of whether companies’ climate claims are supported by their actions
RepRisk data shows that greenwashing risk is rising across many of the sectors financing, supplying, and driving the energy transition, leading to an increase in transition-related claims and commitments.
# What is transition-washing?
Transition-washing is a form of greenwashing in which an organization’s claims about its progress toward a lower-carbon future are not fully supported by evidence. It can involve net-zero commitments, decarbonization plans, transition finance, renewable-energy investment, or claims of climate leadership.
RepRisk data shows the wider context in which transition-washing is emerging. From 2022 to 2026, the number of risk incidents linked to greenwashing increased by 112%. In 2026 alone, 1,594 companies were linked to greenwashing, 28% more than in the previous year.1
In many cases, transition-washing involves highlighting future ambitions while providing limited evidence of meaningful action today. Companies may promote long-term climate targets, transition plans, or investments in low-carbon technologies while failing to disclose continued reliance on carbon-intensive business activities or the pace of actual progress.
What is transition risk?
Although the terms are often confused, transition-washing and transition risk describe different concepts. Transition risks are risks arising from the transition to a lower-carbon, more sustainable economy, including changes in policy, law, technology, markets, and stakeholder expectations that may affect an organization's financial position, financial performance, cash flows, strategy, or business model.
# What is the difference between transition-washing and greenwashing?
Greenwashing is generally understood as making misleading, unsubstantiated, or exaggerated environmental claims that create a false impression of sustainability. RepRisk defines greenwashing through the intersection of environmental issues and misleading communication.
Transition-washing is a specific form of greenwashing focused on claims about the shift to a lower-carbon economy.
| Greenwashing | Transition-washing |
|---|---|
Broad misleading environmental claims |
Misleading claims about the energy transition |
Often focuses on sustainability credentials |
Often focuses on net-zero targets, transition plans, climate commitments, and renewable investments |
May involve false or exaggerated environmental benefits |
May involve overemphasizing future ambitions while underreporting present-day realities |
Applies across a wide range of environmental topics |
Focused on claims about the energy transition and decarbonization |
The distinction matters because climate-related scrutiny is increasingly focused not on whether organizations acknowledge climate change, but whether their actions match their commitments. As investors, regulators, NGOs, journalists, and consumers demand greater transparency, the credibility of transition claims is becoming a significant business conduct risk.
# What are examples of transition-washing?
Transition-washing can take many forms. Examples include:
- Promoting ambitious net-zero targets without credible implementation plans
- Highlighting renewable energy investments while expanding fossil fuel operations
- Marketing transition finance products without clear evidence that financing supports genuine decarbonization
- Presenting selective data that creates an incomplete picture of environmental performance
- Promoting a low-carbon project without acknowledging its potential impacts on ecosystems, land, water, or local communities
Importantly, not all cases involve deliberate deception. As expectations, regulations, and scientific understanding continue to evolve, organizations may find that claims once viewed as credible are later challenged by stakeholders, regulators, or investors.
# Why is transition-washing becoming more important?
The rise of transition-washing reflects a broader shift in how greenwashing risk is evolving. Ten years ago, stakeholders were often questioning whether environmental claims were accurate. Today, the debate is increasingly about whether organizations can demonstrate meaningful progress against the climate ambitions they promote.
This shift is occurring for several reasons:
- Increased regulatory scrutiny
Stricter climate disclosure and environmental claims regulations are increasing pressure on organizations to substantiate transition-related claims. - Growing investor expectations
Investors are seeking evidence that climate commitments are supported by measurable actions and credible transition pathways. - Rising reputational risks
Stakeholders are increasingly scrutinizing the gap between transition commitments and real-world performance.
# Why does transition-washing matter for risk management?
Transition-washing can create significant business conduct risks that affect companies, investors, lenders, and other stakeholders. Potential consequences include:
- Regulatory investigations and enforcement actions
- Litigation and legal challenges
- Investor scrutiny and engagement
- Reputational damage
- Loss of stakeholder trust
- Reduced confidence in sustainability and transition finance initiatives
For financial institutions, transition-washing risk can extend beyond their own climate claims to the companies, projects, and activities they finance, invest in, or underwrite. As transition finance grows, banks and asset managers may face scrutiny over whether the activities they support align with the environmental claims attached to them.
This exposure is reflected in RepRisk data. In 2026, Financial Services and Banks represented one-fifth of all sector linkages among companies linked to greenwashing, with Financial Services recording a 40% year-over-year increase and Banks a 23% increase.
# How can banks and investors assess transition-washing risk?
While transition risk refers to the financial and strategic risks associated with the shift to a lower-carbon economy, RepRisk data2 provides insight into reported business conduct that may support or contradict an organization's transition claims. It can surface risk incidents connected to transition plans, climate commitments, decarbonization strategies, transition finance, stakeholder impacts, regulatory compliance, and allegations of greenwashing.
RepRisk draws on sources including regulators, courts, NGOs, and local and international media, while excluding company self-disclosures from its risk data. This enables organizations to compare transition claims with reported impacts at company, project, and portfolio level, complementing traditional climate and financial risk assessments.
Want to learn more about how RepRisk solutions can help you mitigate greenwashing risk?
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Lobbying: Attempts to persuade regulators into supporting actions that are favorable to a company and/or a project while potentially causing adverse direct or indirect environmental, social, and/or governance impacts.
Greenwashing: A practice where environment-related statements, declarations, actions, or communications do not clearly and fairly reflect the actual environmental performance of an entity, or a product, or services. Misleading communication can occur through omission of information or the provision of false or deceptive information. Greenwashing can occur either intentionally or unintentionally.
These can be analyzed in combination with RepRisk’s dedicated Misleading Communication (including greenwashing) Issue, as well as Environmental Issues, such as Climate Change, GHG Emissions, and Global Pollution.
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