Where biodiversity risk grows, greenwashing follows

Biodiversity loss is fast becoming one of the defining business risks of the decade. But it is also, and increasingly, a driver of greenwashing. RepRisk’s fourth annual report on greenwashing, Where biodiversity risks grow, greenwashing follows, presents a detailed examination of how nature-related risks and misleading sustainability claims are becoming intertwined, revealing a pattern with material implications for investors, regulators, sustainability leaders, and organisational decision-makers.

The report’s key finding is stark: the global share of companies linked to both biodiversity and greenwashing risk has doubled in five years, rising from 3% in 2021 to 6% in 2025.

As organisations face mounting pressure to show progress on nature-positive strategies, many are making claims that do not hold up under scrutiny. The result is a widening credibility gap, and growing exposure for businesses across sectors and regions.

Greenwashing: No disguise for biodiversity risk

Biodiversity underpins global economic activity. From soil health to water systems, ecosystem stability is foundational to supply chains, resource availability, and long-term growth.

But RepRisk’s report goes further, specifically focusing on the link between greenwashing and biodiversity risk. It finds that rising awareness of nature-related risk and the adoption of “nature positive” strategies are increasing pressure on companies to demonstrate progress, which can result in claims that are overstated, vague, or misleading.

RepRisk’s data shows that biodiversity is now the most frequently flagged environmental risk. Drawing on a large dataset of global business-conduct risk incidents, the analysis reveals:

• How biodiversity loss and misleading sustainability claims intersect across regions and sectors
• Which industries are most exposed to greenwashing risk
• The ten countries that account for nearly half of all biodiversity-related incidents worldwide
• How differing enforcement regimes shape market behaviour

As biodiversity climbs the sustainability agenda, especially as we come out of COP30, organisations are struggling to demonstrate meaningful action. The report highlights that an increasing share of nature-related incidents now also carry greenwashing allegations, with the percentage of biodiversity incidents referencing misleading claims tripling since 2021.

Even well-intentioned messaging carries risks. Nature-positive commitments, deforestation-free pledges, and ecosystem-restoration narratives are often communicated long before the necessary operational changes are in place. When companies’ aspirations outpace their implementation, reputational and regulatory exposure follows.

Where risk concentrates: Regional and sector hotspots

Although biodiversity loss is a global challenge, RepRisk’s findings show that incidents cluster in regions where ecological vulnerability intersects with complex supply chains, heavy industry, and robust monitoring systems. As a consequence, the data shows just ten countries accounting for nearly half of all biodiversity-related incidents.

Another compelling report insight is the consistently high exposure of certain sectors, particularly banking and financial services, to greenwashing risk. In 2025, 294 financial institutions were flagged for greenwashing risks — a 19% increase year-on-year, and outnumbering those flagged in high-impact industries such as oil & gas or industrial metals.

This prominence stems from finance’s enabling role: investment decisions shape supply chains, infrastructure projects, and corporate sustainability pathways. As sustainable finance products grow — from green bonds to biodiversity-linked instruments — so does scrutiny. Investors and regulators increasingly demand evidence that marketed environmental benefits are credible and measurable.

Repeat offenders: The need for governance reform

One concerning trend is the persistence of greenwashing allegations over time. In some sectors, the majority of companies flagged in 2024 were flagged again in 2025. This points not to isolated communication missteps but deeper governance and accountability challenges. It suggests that many organisations are yet to embed strong internal controls, verification mechanisms, or cross-functional oversight for sustainability claims.

The consequences are mounting. Regulators are imposing larger penalties, with fines now reaching up to 10% of annual turnover in jurisdictions such as the UK. Investors, too, are becoming more active: the report cites cases of major asset owners withdrawing mandates on sustainability grounds, signalling that market tolerance for weak or inflated claims is diminishing.

Why the biodiversity and greenwashing link matters

The convergence of biodiversity risk and greenwashing risk undermines the credibility of sustainability efforts. If companies cannot substantiate claims, stakeholders lose the ability to distinguish genuine progress from surface-level marketing — making it harder for the market to reward those taking real action.

RepRisk’s analysis shows that robust monitoring of business conduct is becoming essential for maintaining trust in the sustainability transition. Biodiversity loss is already reshaping economic systems; the parallel rise in greenwashing risk is reshaping expectations of corporate accountability.

Through real-world examples and longitudinal data, RepRisk’s report makes clear that greenwashing is not a passing trend. For investors, regulators, and corporates alike, the report offers insights into how greenwashing can distort capital flows, erode trust, and undermine the ecosystems on which the global economy depends.

Access the full report here