APG is launching the ELSA Lab Anti-greenwashing together with the Open University, Brightlands Smart Services Campus and the AI hub Brightlands. The lab investigates how you can use AI technology and alternative data sources to detect, predict and prevent greenwashing. We spoke about it with Peter Strikwerda, Global head of Digitalization & Innovation, and Lonneke Roon, Senior Investment Specialist, from APG Asset Management.
Greenwashing, the false presentation of products or activities as environmentally friendly or sustainable, is a growing concern in the world of corporate social responsibility and investing. “Responsible investing and preventing greenwashing are close to APG's heart. We are therefore very much looking forward to this research project and the collaboration with the Open University and Brightlands Smart Services Campus in Heerlen”, says Peter.
The ELSA Lab Anti-greenwashing will work according to the ELSA-by-design approach. This means that ethical, social and legal aspects are leading when using data and AI. The uniqueness of the ELSA Lab is also its multidisciplinary approach, combining expertise in the field of data science and AI with knowledge of the Open University on sustainability reporting (ESG), in combination with the expertise of one of the largest investors in the world, namely APG.
Assessing good and bad practices
“Being able to assess good and bad practices surrounding greenwashing is a growing social problem for all kinds of stakeholders such as banks, insurers, but also regulators and consumers. This also applies to us as socially conscious pension investors. It is of great importance to be able to properly assess companies on their claims regarding the environmental friendliness of their products and services, such as CO2 reduction. That assessment influences our choices for investments or, for example, our commitment, the agreements we make with companies in which we invest,” says Lonneke.
The initiators believe they can better detect, predict and prevent greenwashing with the help of big data and advanced AI. “If that hypothesis is true, it will lead to new insights and standards for the aforementioned stakeholders and transparency in the market, and it probably also has a positive effect on the contribution of organizations to environmental goals,” Peter explains.
The first investigation
The initial research will result in an overview of greenwashing discourses and public sentiments, a set of AI models for greenwashing detection and guidelines for effectively detecting and preventing greenwashing. The first results of the study are expected in early 2025.
Peter: “With the increasing attention to sustainability and the EU's efforts to promote transparency, the need for reliable information about the sustainability of products and services is greater than ever. The ELSA Lab Anti-greenwashing takes an important step in that direction and can provide a breakthrough in better-informed decision-making about sustainable investments.”