In recent years, both the government and major finance organizations have provided a number of incentives for companies to clean up their operations and choose less-polluting alternatives. The point was to reduce the production of heat-trapping gases that warm up the planet. However, there's new evidence that the projects being funded this way aren't always as green as they appear, the Associated Press reported.

What's happening?

An investigation by The Examination, Mississippi Today, and Toronto Star revealed the disappointing truth about "sustainability-linked loans," or SLLs, per the AP. These are loans provided to companies by banks, which offer discounted rates in exchange for promises that the companies will reduce their polluting activities.

So far, so good; companies are responsible for a huge amount of pollution, and reducing it would benefit the whole world. But unfortunately, the specific conditions of these loans are kept secret, and it appears that they're very lax, allowing companies to actually increase their total pollution. 

They just make the company look better for promising change, and the banks look better for funding it. In other words, this is greenwashing.

"They do not lead to measurable change," said Richard Brooks, the climate finance director of nonprofit Stand.Earth, per the AP report. "And they're really meant to greenwash your finances mostly for expansion activities."

For example, huge polluters like Shell, Enbridge, and Drax got SLLs. The investigation found that nearly one in five SLL dollars — a total of $286 billion — went to environmentally damaging industries between 2018 and 2023.

Some companies claimed to reduce their pollution by switching from fossil fuels to burning wood, which is actually worse for the environment. Others reduced the "intensity" of their pollution — polluting less per unit of their product produced — while expanding operations and producing more pollution in total.

Why is it important if big polluters get SLLs?

The good publicity that companies and banks get for these promises to pollute less is misleading for consumers, many of whom prefer to support eco-friendly companies. You can't make an informed decision about where to shop if you don't have the facts.

Not only that, but the more money flows to big polluters, the less funding is available for truly green companies that would benefit the world.

Do you worry about air pollution in and around your home? Yes — always 💯 Yes — often 😷 Yes — sometimes 😟 No — never 🙅 Click your choice to see results and speak your mind.

Meanwhile, this ever-increasing air pollution hurts everyone. It's unhealthy and even unsafe, and it's leading to more extreme weather that is dangerous for everyday people.

What can I do about misleading loans?

One of the biggest ways you can make a difference is with green banking. Take your money away from institutions that fund polluting industries, and instead, open an account with a bank that invests responsibly. You can also vote for policy changes that will hold polluters accountable.

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