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13 December 2023
This article is part of the Winter 2023 edition of our On Point Scottish Professional Indemnity newsletter.
Greenwashing is where a company misleads others, whether intentionally or unintentionally, through policies or practices, that it is taking greater steps to protect the environment than it actually is. This may be most obvious where companies make commitments to reduce their emissions to net zero, however there is no credible plan in place. There are growing requirements for businesses to be transparent in their environmental, social and corporate governance policy with annual reporting requirements since April 2022. There are clear risks for insurers, both under D&O policies and PI lines. Whilst claims against the directors of a company for an inadequate ESG Strategy or misleading reporting will see an initial surge, professionals involved in advising businesses in mitigating their environmental impact may also see a rise in claims brought against them should their advice fall below the standard to be expected an ordinarily competent professional. Insurers, brokers and practitioners will require to take appropriate risk management steps to tackle this growing area of climate litigation. 
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