Balance sheet and Climate-washing: Difference between pages

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''Law - regulation - environmental concerns - greenwashing.''


1.
Climate-washing is a derogatory term for the overstatement of an organisation's climate-related concerns and actions, or those of a sector.


One of the primary statements of a reporting entity's financial accounts.
The concept derives from - and is closely related to - ''greenwashing''.


The balance sheet lists the assets, liabilities and shareholders’ funds at the balance sheet date.


Under the 'double entry' accounting convention, assets are Debits (DR) and liabilities and shareholders' funds are Credits (CR).
:<span style="color:#4B0082">'''''Climate-washing goes beyond greenwashing'''''</span>


The standard UK balance sheet presentation for external reporting is Net Assets = Shareholders' Funds.
:"More recently, greenwashing [legal] complaints have also been brought on climate change grounds, where marketing campaigns have been alleged to mislead and/or overstate advertised performance in the context of climate change.  


The Net assets part of the balance sheet is sometimes called the 'top half'.
:Plaintiffs may seek monetary damages, civil penalties, and/or injunctive relief for the harm done by misleading, greenwashed communications.
The Shareholders' funds part being the 'bottom half'.


For example in summary:


TOP HALF:
:This type of climate-related greenwashing may be referred to as ‘climate-washing’, and litigation brought against it highlights the gap between state and non-state actors’ words and actions regarding climate change.
Assets 100  DR
- Liabilities (20) CR
= Net assets   80  DR


BOTTOM HALF:
:It may include claims relating to the environment, human health, economics, or other aspects of climate change.
Shareholders’ funds 80  CR


(Total shareholders' funds being appropriately detailed in turn into share capital and reserves, as well as the individual assets and liabilities being appropriately listed in fuller detail.)


The balance sheet equation in summary using the convention above is 80 = 80.
:The terms ''greenwashing'' and ''climate-washing'' have been used interchangeably.  


:However, a distinction can be made in that climate-washing may encompass issues that go beyond the natural environment.


2.
:This is analogous with how climate change concerns might go beyond - or be more specific than - environmental concerns."


There are many other ways to present this information in other balance sheet formats.
:''Benjamin, Lisa; Bhargava, Akriti; Franta, Benjamin; Martínez Toral, Karla; Setzer, Joana; and Tandon, Aradhna. 2022. “Climate-Washing Litigation: Legal Liability for Misleading Climate Communications.” Policy Briefing, The Climate Social Science Network - January 2022.''
Alternative balance sheet conventions maintain the balanced/double-entry principle, but may show for example:


Total Assets = Total Liabilities + Shareholders' Funds.


Presented on this alternative (assets = liabilities) basis, using the same summary figures:
== See also ==
 
* [[Actor]]
TOP HALF:
* [[Climate change]]
Total assets   100 DR
* [[Climate Social Science Network]]  (CSSN)
 
* [[Damages]]
BOTTOM HALF:
* [[Environmental concerns]]
Total liabilities   20 CR
* [[Ethics washing]]
+ Shareholders’ funds     80 CR
* [[Greenwash]]
= Total liabilities & shareholders’ funds 100 CR
* [[Injunction]]
* [[Law]]
* [[Liability]]
* [[Litigation]]
* [[Plaintiff]]
* [[Regulation]]


The same balance sheet information has now been presented as 100 = 100, using the alternative convention.
The Total liabilities of 20 CR are now presented in the bottom half of the balance sheet (rather than in the top half as before).
The choice of presentation will depend on the purposes for which the balance sheet information is required, together with any rules or conventions applying to the entity's external reporting.
== See also ==
* [[Assets]]
* [[Balance sheet exposure]]
* [[Cashflow statement]]
* [[Credit balance]]
* [[Current/non-current method]]
* [[Debit balance]]
* [[Double entry]]
* [[Event after the balance sheet date]]
* [[Financial statements]]
* [[Income statement]]
* [[Liabilities]]
* [[Off balance sheet]]
* [[Off-balance sheet finance]]
* [[Post balance sheet event]]
* [[Profit and Loss account]]
* [[Share capital]]
* [[Shareholders’ funds]]
* [[Short term]]
* [[Statement of financial position]]


==External link==
*[https://www.lse.ac.uk/granthaminstitute/publication/climate-washing-litigation-legal-liability-for-misleading-climate-communications/ “Climate-Washing Litigation: Legal Liability for Misleading Climate Communications.” Policy Briefing, The Climate Social Science Network]


==Other links==
[[Category:Accounting,_tax_and_regulation]]
[http://www.treasurers.org/node/5176 Is your balance sheet sound?, The Treasurer, 2009]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Compliance_and_audit]]
[[Category:Ethics]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 03:36, 17 January 2022

Law - regulation - environmental concerns - greenwashing.

Climate-washing is a derogatory term for the overstatement of an organisation's climate-related concerns and actions, or those of a sector.

The concept derives from - and is closely related to - greenwashing.


Climate-washing goes beyond greenwashing
"More recently, greenwashing [legal] complaints have also been brought on climate change grounds, where marketing campaigns have been alleged to mislead and/or overstate advertised performance in the context of climate change.
Plaintiffs may seek monetary damages, civil penalties, and/or injunctive relief for the harm done by misleading, greenwashed communications.


This type of climate-related greenwashing may be referred to as ‘climate-washing’, and litigation brought against it highlights the gap between state and non-state actors’ words and actions regarding climate change.
It may include claims relating to the environment, human health, economics, or other aspects of climate change.


The terms greenwashing and climate-washing have been used interchangeably.
However, a distinction can be made in that climate-washing may encompass issues that go beyond the natural environment.
This is analogous with how climate change concerns might go beyond - or be more specific than - environmental concerns."
Benjamin, Lisa; Bhargava, Akriti; Franta, Benjamin; Martínez Toral, Karla; Setzer, Joana; and Tandon, Aradhna. 2022. “Climate-Washing Litigation: Legal Liability for Misleading Climate Communications.” Policy Briefing, The Climate Social Science Network - January 2022.


See also


External link

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