Greenwashing — the practice of misleading consumers and stakeholders about a company’s environmental practices (Delmas & Burbano, 2011) — has emerged as a significant concern within the banking sector. Banks play a critical role in financing the transition to a low-carbon economy but often overstate their environmental commitments without substantive action (Finger et al., 2018). 

This undermines consumer trust, misallocates capital, and delays meaningful progress toward sustainable development goals (Deschryver & De Mariz, 2020; Galletta et al., 2024). As the pressure to meet ESG standards grows, so too does the risk that banks engage in deceptive sustainability reporting (Khan et al., 2021).

Using the PRISMA (Preferred Reporting Items for Systematic Reviews and MetaAnalyses) framework, the authors conducted a systematic review of 19 peerreviewed academic articles (1999–2023) sourced from Web of Science and Scopus. 

A bibliometric analysis and keyword co-occurrence clustering were conducted using VOSviewer. The analysis revealed several critical insights. 

First, greenwashing is prevalent in the banking industry, with institutions often emphasizing sustainability in their communications without implementing substantive changes, particularly in their financing of high-emission industries. 

Second, key drivers of greenwashing include pressure to meet ESG targets, regulatory gaps, and stakeholder expectations. 

Third, the consequences of greenwashing are far-reaching, eroding consumer trust, misallocating capital, and delaying genuine sustainability efforts. Finally, the study identified significant research gaps, particularly the lack of standardized sustainability metrics and insufficient regulatory oversight, which exacerbate the problem.