The Illusion of Green

This chapter investigates the growing phenomenon of greenwashing within Environmental, Social, and Governance (ESG) investing, revealing how the illusion of sustainability undermines market credibility and misleads well-intentioned investors. It explores how companies and financial institutions often exploit vague ESG criteria, selective disclosures, and marketing narratives to project a false image of environmental and ethical responsibility. Through an analysis of regulatory loopholes, investor psychology, and case studies from global and Southeast Asian contexts, this chapter highlights how greenwashing distorts capital flows, erodes trust, and creates systemic inefficiencies in sustainable finance. It concludes by emphasising the need for stronger verification mechanisms, transparent standards, and behavioural safeguards to restore authenticity and accountability in ESG markets.