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In today’s global economy, ethics is no longer a secondary concern but a central element of business practice. Companies are increasingly judged not only by their financial performance but also by their environmental and social impact. This Padlet explores the ethical issue of greenwashing in corporate ESG strategies, drawing on the article by López‑Cabarcos, Ziane, López‑Pérez, and Piñeiro‑Chousa (2025). The article examines how ESG factors contribute to the United Nations Sustainable Development Goals (SDGs), with particular relevance to SDG 12: Responsible Consumption and Production and SDG 13: Climate Action. By analysing this issue through ethical theories, the discussion highlights why authentic ESG integration is essential for sustainable development and what the consequences of unethical conduct mean for communities locally and globally.

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The article by López‑Cabarcos et al. (2025), published in the Journal of Business Ethics, investigates how ESG practices—such as environmental management, labour standards, product responsibility, and governance—affect corporate contributions to the SDGs. Using fuzzy‑set qualitative comparative analysis (fsQCA) on 137 companies from the EUROSTOXX and S&P 500 indices, the authors conclude that combinations of ESG factors are more effective than isolated actions in advancing SDG outcomes.

The ethical issue highlighted is the risk of greenwashing. Many firms promote ESG initiatives in their reports but fail to implement meaningful change. This practice misleads stakeholders, undermines trust, and slows progress toward sustainability. The article stresses that genuine ethical commitment—particularly in governance and labour practices—is crucial for real impact.

The findings show that companies with strong governance and integrated ESG strategies outperform peers in sustainability metrics and stakeholder trust. For example, firms that design products with lifecycle sustainability in mind not only reduce environmental harm but also strengthen consumer loyalty. This evidence demonstrates that ethical business conduct is not just a compliance exercise but a strategic necessity. However, the study also notes that reporting standards remain inconsistent, leaving space for superficial ESG claims.

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The Ethical Commitment of Business Strategy: ESG-Related Factors as Drivers of the SDGs - Journal of Business Ethics

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Companies play an important role in sustainable development. While many companies have incorporated ESG initiatives into their strategies, the specific impact of these efforts on the SDGs remains unclear, especially regarding how these initiatives are prioritized or aligned within corporate strategies. Despite the common relationship between ESG practices and sustainability, limited research has investigated how ESG strategies contribute to the SDGs. This paper aims to assess the ethical commitment of organizational practices, analysing how the combination of five ESG-related variables (ecological impacts, access and affordability, labour practices, product design and lifecycle management, and business ethics) leads to a positive contribution to the SDGs among 137 companies belonging to EUROSTOXX and S&P500 indexes. A fsQCA analysis has been conducted, distinguishing between ESG variables with internal, external, human and non-human connotations. The findings highlight that the combination of all these variables rather than isolated ESG practices is essential to achieve the SDGs. Although differences are shown between the companies belonging to the two indexes, ethical governance, environmental issues and labour practices have emerged as the most relevant ESG variables for achieving sustainable goals. This study provides a better understanding of what and how ESG initiatives can contribute to the SDGs, helping companies and policy makers identify the ethical approaches to consider when designing strategies to advance towards sustainable performance.

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Two ethical theories provide useful insights into this issue: Kantian ethics and Utilitarianism.

From a Kantian perspective, businesses have a duty to act truthfully and respect stakeholders as ends in themselves. Greenwashing violates this principle because it deceives consumers and investors, treating them as a means to profit. A company that publishes misleading sustainability reports is not acting in accordance with the categorical imperative, which requires honesty and universal moral law. For Kant, even if greenwashing brings short‑term financial gain, it remains unethical because it cannot be justified as a universal practice.

By contrast, Utilitarianism evaluates actions based on their consequences for overall well‑being. From this view, authentic ESG practices generate long‑term benefits for society and the environment, while greenwashing produces harm by delaying climate action and eroding trust. Although greenwashing may benefit shareholders in the short term, the negative consequences for communities, ecosystems, and future generations outweigh these gains.

Together, these theories highlight why greenwashing is ethically unacceptable. Kantian ethics stresses the duty of honesty, while Utilitarianism emphasises the broader harm caused by deception. Both frameworks reinforce the article’s conclusion that genuine ESG integration is essential for sustainable development.

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The ethical issue of greenwashing directly impacts the implementation of SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action). For SDG 12, misleading sustainability claims prevent consumers from making informed choices, undermining efforts to shift toward sustainable consumption. For SDG 13, false environmental promises delay urgent climate action, as companies may appear to be addressing emissions while continuing harmful practices.

The article by López‑Cabarcos et al. (2025) shows that when ESG factors are implemented holistically—combining governance, labour, and environmental practices—companies make genuine contributions to the SDGs. However, when ESG is treated as a marketing tool, progress becomes symbolic rather than substantive. This tension illustrates why ethical business conduct is critical: without it, the SDGs risk being reduced to branding exercises rather than real global change.

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To deepen understanding of this issue, several additional resources are useful:

The United Nations SDG website provides official targets and indicators for SDG 12 and 13.

Reports from NGOs such as Greenpeace highlight real‑world cases of corporate greenwashing.

Academic studies, such as AlHares (2025) on ethical leadership and Long (2025) on environmental ethics, reinforce the importance of authentic ESG practices.

These resources show that greenwashing is not just a theoretical concern but a practical barrier to sustainability. They also provide examples of how ethical leadership and transparent reporting can help align business practices with global goals.

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Goal 13 | Department of Economic and Social Affairs

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Take urgent action to combat climate change and its impacts

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This Padlet has examined the ethical issue of greenwashing in corporate ESG strategies, using López‑Cabarcos et al. (2025) as the central article. The analysis showed that while ESG has the potential to drive progress toward SDG 12 and 13, superficial or misleading practices undermine this potential. Applying Kantian ethics highlights the duty of honesty, while Utilitarianism demonstrates the broader harm caused by deception. Together, these perspectives reinforce the need for authentic ESG integration. The bigger picture is clear: for Australia and the global community, transparent and ethical business practices are essential to achieving sustainable development and building trust between companies and society.