When Trust Breaks: The Cost of Greenwashing and the Case for Stronger Governance

Regulatory fines, investor scrutiny, and public backlash have made it clear: unsubstantiated environmental, social, and governance (ESG) claims can no longer be excused as marketing missteps; they’re governance failures. Recent greenwashing enforcement actions in the financial services industry, such as the €25 million fine against DWS in Germany (April 2025) and the AU$ 10.5 million penalty against Active Super in Australia (March 2025), highlight a clear trend. What was once dismissed as poor communication is now treated as a breach of product trust with serious financial, legal, and reputational consequences.

Companies face increasing pressure to ensure their sustainability claims are accurate, verifiable, and aligned across investment, marketing and compliance teams. Addressing this requires transparent, accountable disclosures and consistent governance throughout the lifecycle of key business assets, whether investment products, member communications, PDS fact sheets, impact reports, or others.

Skyjed’s platform supports this by helping organisations integrate ESG oversight and verification into each stage of the asset lifecycle, reducing the risk of greenwashing before it becomes a compliance or reputational concern. By applying Skyjed’s governance framework, teams can proactively manage greenwashing risk, respond confidently to regulatory demands, and reduce the time spent on compliance processes by more than 50%.

So how can businesses avoid the trap of greenwashing? It begins with lifecycle governance.

A Lifecycle Governance Approach to Greenwashing

Skyjed’s approach centres on the principle of Responsible Lifecycle Governance, ensuring that sustainability decisions are not just made but made transparently, collaboratively, and with traceability across functions. Here’s how Skyjed’s platform supports this:

1. Lifecycle Governance Framework

Sustainability claims must reflect the actual performance and characteristics of your products, services, policies, and investment strategies. This requires accurate disclosures and consistency across your investment strategy, ESG policies, sustainability reports, and investor communications. At Skyjed, we help organisations manage ESG data across the entire lifecycle of these business assets.

Key checkpoints ensure that:

• Sustainability criteria are evaluated against anti-greenwashing rules before public claims are made.
• Review and sign-off processes are applied consistently.
• ESG goals are integrated into lifecycle strategy and performance.

2. Centralised ESG Audit Trail

Disparate data, siloed teams, and undocumented decisions breed inconsistent claims. Skyjed solves this by creating a single source of truth for ESG data and documentation.

All evidence supporting ESG statements, assumptions, risk assessments, audit logs, and performance metrics is captured in one place and linked to the relevant lifecycle phase. This not only strengthens internal alignment but also ensures you are prepared for regulatory scrutiny.

With a centralised audit trail, you can:

• Demonstrate due diligence on all ESG disclosures.
• Align investment, compliance, and marketing teams on the same information.
• Provide clear records for external auditors or regulators.

3. Automated Controls and Risk Alerts

Greenwashing doesn’t always happen intentionally; it often arises when oversight fails. Our platform reduces this risk with automated guardrails that detect ESG inconsistencies and prompt action before issues escalate.

Using configurable thresholds and AI-powered alerts, Skyjed helps you:

• Flag ESG claims that don’t align with underlying data.
• Trigger ad-hoc reviews when regulations or material inputs change.
• Highlight gaps between ESG goals and actual performance.

This allows you to move from reactive compliance to proactive risk management.

4. Cross-functional Collaboration Tools

Sustainability is not the job of one team: it’s a cross-functional responsibility. Skyjed bridges silos by enabling collaborative governance across departments.

Investment managers, product owners, compliance officers, and marketing teams can all access a shared workspace to:

• Monitor ESG performance in real time with executive-level dashboards.
• Assign responsibilities for disclosures and compliance actions.
• Track how decisions evolve over time.

This shared visibility ensures that no team acts in isolation and everyone is working from the same source of truth.

Building Product Trust Through Lifecycle Integrity

In a world where ESG claims are under scrutiny, organisations need more than good intentions; they need systems that enforce integrity.

Skyjed’s lifecycle governance platform gives you the tools to embed ESG data into the fabric of your operations with the control and transparency that regulators and stakeholders expect.

By using Skyjed, companies are not only reducing the risk of greenwashing, but they're also building long-term product trust, improving ESG accountability, and unlocking new value through sustainable lifecycle management.

Ready to take control of ESG risk and embed lifecycle governance in your business?

Contact the Skyjed team today 

• Request a free Skyjed greenwashing assessment session (including demo)
• Access our comprehensive anti-greenwashing checklist
• Learn how teams using Skyjed double their compliance productivity by cutting administration time in half.

RESPONSIBLE LIFECYCLE MANAGEMENT: GETTING STARTED IN 6 STEPS

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