Addressing Greenwashing in Sustainability Reports of Power Transmission Companies: Impacts and Solutions

As sustainability expectations intensify, Environmental, Social, and Governance (ESG) disclosures have become a key mechanism through which transmission utilities communicate their environmental and societal contributions. However, discrepancies between narrative claims and operational performance have raised concerns about greenwashing, which undermines stakeholder trust. This paper addresses greenwashing in power transmission companies by analysing its impacts, identifying its underlying drivers, and proposing practical and technically grounded solutions to improve the credibility of sustainability reporting. The objectives of the study are to identify the dominant forms of greenwashing in sustainability reports of power transmission companies, assess the effectiveness of existing regulatory and reporting frameworks in limiting misleading disclosures, and develop a sector-specific framework to detect, measure, and mitigate greenwashing risk.

A mixed-methods approach is adopted. First, a structured content analysis of sustainability reports is conducted to identify greenwashing patterns in language, data presentation, and alignment between stated ESG commitments and operational outcomes. Second, a comparative assessment of sustainability reporting frameworks is undertaken to evaluate their effectiveness in detecting and preventing greenwashing in the transmission sector. Building on this analysis, a transmission sector specific Greenwashing Assessment Framework is developed, distinguishing between narrative claims and operationally verifiable evidence across material

Environmental, Social, and Governance indicators. These indicators are scored using binary and Likert-scale methods to construct a Greenwashing Risk Index (GWI). Regression analysis is then applied to examine the relationship between greenwashing risk and key explanatory variables.

The results show that greenwashing in power transmission companies most frequently manifests through vague and non-quantified environmental claims, selective disclosure of favorable performance data, and overstated narratives related to renewable integration and smart grid initiatives. While regulatory frameworks have expanded ESG disclosure requirements, they remain limited in addressing narrative-driven greenwashing due to generic indicators, weak verification of qualitative claims, and insufficient sector-specific metrics.

Regression findings indicate that independent third-party assurance, and higher disclosure granularity are significantly associated with lower greenwashing risk.

The paper proposes actionable solutions to address greenwashing in the power transmission sector, including enhanced reporting mechanisms, strengthened verification processes for both qualitative and quantitative disclosures, integration of sector-specific indicators. The proposed framework provides regulators, utilities, investors, and auditors with a practical tool to improve comparability, credibility, and trust in sustainability reporting. In addition to regulators and external stakeholders, the framework supports internal sustainability and reporting teams by providing a structured methodology to align narrative disclosures with operational evidence, thereby improving consistency, credibility, and audit-readiness.