The Transparency Paradox

In 2021, Desiree Fixler was hired as Group Sustainability Officer for DWS, Deutsche Bank’s asset management arm. The firm’s marketing said “ESG is in our DNA.” Fixler looked at the data and disagreed. She raised concerns internally that the ESG claims were unsubstantiated, that the firm was overstating how much environmental and social criteria actually factored into investment decisions.

She was fired in March 2021, the day before the annual report was published.

When she went public, the SEC raided DWS offices. The firm was fined $19 million by the SEC and €25 million by Frankfurt prosecutors. Fixler was forced to leave Germany.

The head of sustainability was fired for pointing out the gap between what the company said and what the company did. The company was punished not for its environmental impact, but for its environmental claims. Had DWS never said “ESG is in our DNA,” there would have been nothing to investigate.

The Asymmetry

H&M launched a Conscious Collection, a line of clothes marketed as more sustainable. The Changing Markets Foundation analyzed the line and found it contained a higher proportion of synthetic fibers (72%) than H&M’s regular fast-fashion line (61%). Class-action lawsuits were filed. Regulatory investigations followed in the UK, where the CMA investigated H&M’s parent ASOS, Boohoo, and George at Asda for green marketing claims.

Meanwhile, Shein (which grew emissions 81% between 2022 and 2023, outpacing even its 43% revenue growth) does not release standardized ESG reports. Shein received an F on the same sustainability scorecard where H&M led. It faces less greenwashing litigation because it makes fewer testable claims.

H&M got punished for trying. Shein didn’t get punished for not trying.

Delta Air Lines claimed to be “the world’s first carbon-neutral airline.” It was sued in May 2023 for relying on carbon offsets that allegedly didn’t counteract emissions. The case survived Delta’s motion to dismiss. No other US airline that made no carbon-neutral claim has been sued.

A Dutch court ruled in March 2024 that 15 of 19 claims in KLM’s “Fly Responsibly” campaign were misleading and illegal — that the campaign painted “too rosy a picture” of the airline’s environmental impact. Airlines that never ran sustainability campaigns faced no legal action.

In October 2025, a Paris court ruled that TotalEnergies misled consumers with its claims about carbon neutrality and being “a major player in the energy transition.” The lawsuit was triggered by Total’s rebrand to “TotalEnergies.” The name change itself created the claim. Oil companies that made no transition claims were not sued.

The pattern is consistent: the system punishes claims, not impact. If you say nothing, there’s nothing to test.

The Rational Response

The companies noticed.

A South Pole survey found that 70% of sustainability-committed companies worldwide are deliberately hiding their climate goals. Not abandoning them. Hiding them. Eighty-three percent still maintain net-zero targets. Seventy-five percent are increasing their budgets. But 58% are intentionally reducing their climate communications. By sector: 88% of environmental services firms are pulling back messaging. Consumer goods: 86%.

The term “ESG” is disappearing from corporate reports. Among S&P 100 companies, use of “ESG” in report titles fell from 40% in 2023 to 25% in 2024 to 6% in the first half of 2025. Eighty-seven percent of the S&P 500 still disclosed climate targets. They just stopped talking about them.

Larry Fink, BlackRock’s CEO, told reporters in 2023 he was “ashamed” the term ESG had been politicized and would stop using it. BlackRock had lost billions in state investments (Texas and Florida divested roughly $2 billion) because it made public ESG commitments. Asset managers that never used the term faced no state divestments.

The work continues. The talking stopped. This now has a name: greenhushing.

The Casualties

The consequences aren’t just legal and financial. They’re personal.

Emmanuel Faber turned Danone into France’s first “entreprise à mission”, a legal commitment to social and environmental goals alongside profit. He created a carbon-adjusted earnings metric. Named the strategy “One Planet, One Health.” Pledged 100% renewable energy by 2030.

Two activist investors, holding less than 6% of shares combined, pressured the board. One explicitly stated that Faber “did not manage to strike the right balance between shareholder value creation and sustainability.” He was removed as both Chairman and CEO in March 2021. CEOs of comparable food companies with no sustainability missions faced no such pressure.

Nestlé withdrew carbon-neutral pledges for KitKat and Nespresso. Left a global alliance pledging to curb dairy methane emissions. Was sued by ClientEarth over recycling claims. The New Climate Institute rated its net-zero goals as “low integrity.” The company’s attempt to make verifiable commitments became the basis for multiple legal challenges.

Unilever’s new CEO scaled back sustainability targets: weakening its virgin plastic reduction target, dropping its diverse supplier spending pledge. Ben & Jerry’s subsequently sued its own parent company for blocking its activism.

In each case, the ambition created the vulnerability. The claim created the target. The transparency created the surface area.

A Necessary Caveat

I want to be careful here, because the pattern above can start to feel like an argument for giving up. It isn’t.

The companies that tried (H&M with its Conscious Collection, Delta with its carbon neutrality pledge, Faber with his restructuring of Danone) were attempting something that matters. They were trying to close the gap between what business does and what business should be accountable for. That effort has value, even when it falls short.

And a lot of the actors punishing them are not operating in good faith. Activist investors who oust a CEO over sustainability commitments while holding less than 6% of shares aren’t protecting shareholder value. They’re exploiting a lever. State treasurers divesting from BlackRock aren’t concerned about fiduciary duty; they’re running political campaigns with pension funds. And class-action firms filing greenwashing lawsuits against companies with real programs aren’t advancing environmental protection. They’re capitalizing on the gap between aspiration and perfection.

The problem isn’t that these companies tried. The problem is that trying, by itself, created a vulnerability that bad-faith actors learned to exploit. And that’s a structural problem worth understanding, not a reason to stop trying.

What Transparency Actually Rewards

This isn’t an argument against transparency. It’s an observation about what transparency tests.

Vale, the Brazilian mining company, published sustainability reports claiming “100% of its dams were certified to be in stable condition.” After the Brumadinho dam collapse killed 270 people, the SEC used Vale’s own sustainability disclosures as the basis for its enforcement action. $55.9 million in fines. The sustainability report became Exhibit A.

Allbirds was sued over its carbon footprint labeling. The case was dismissed in April 2022, because the company had been so transparent about its methodology that the court found no misrepresentation. The same mechanism that destroyed DWS and Vale protected Allbirds.

The difference wasn’t the amount of transparency. It was whether the transparency matched the operations.

DWS said “ESG is in our DNA” when it wasn’t. Vale said its dams were stable when they weren’t. In both cases, the claim outpaced the reality, and transparency exposed the gap.

Allbirds said “here’s our carbon footprint per shoe, and here’s exactly how we calculated it.” The claim matched the operation. Transparency confirmed the coherence.

Transparency doesn’t reward goodness. It doesn’t reward ambition. It rewards coherence — the alignment between what you say and what you’ve actually built. If claims match operations, transparency validates you. If claims outpace operations, transparency destroys you. And if you make no claims at all, transparency has nothing to test.

The system isn’t broken. It’s working exactly as designed. And the thing it’s designed to detect isn’t fraud or negligence or bad faith.

It’s the gap.