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By Paul Allard & Velina Serafimov

Chief Ecosystem Officer & Chief  Impact Officer

Impak Finance

Impact Washing and ESG Greenwashing


Paul and Velina's Path to this Topic...

Paul: Early in my entrepreneur career, I had to deal with the world of finance, and rapidly felt that something was wrong about our system. So, I decided learn all about it: money creation, roles of central banks, investment banks, rating agencies, insurance companies, etc., historic evolution (or degradation) of regulations, financial product creation, etc. 

What I discovered is that today, 97% of the money created in the world is created by private banks, and 85% of this capital is invested in speculative financial products. In other words, we are in a world where we create money to create money. 

The consequences of this system? 

Global inequality is at its peak (see Stiglitz’ last book), and 60% of the biodiversity has disappeared over the last 60 years (see WWF 2019 report). Those empiric observations demonstrates the failure of “responsible finance” under the ESG lens over the last 20 years.

Velina: I was studying business administration with the idea of becoming a “classic” business professional, with a focus on accounting or finance. I had a sustainability class back then and I thought it was a joke, as the topics of environmental and social issues were so superficially covered. It was early days of CSR and it was not inspiring. I swore to myself I’d never be a “sustainability professional”! Wisdom came later and I learned that I should never say never... I became a financial auditor and already then, it struck me how the topics such as restoration of mining sites or opinions of impacted local communities were considered or how a lack of diversity in the employees influenced the outputs of a company. The more I worked in different companies, the less at ease I was with the negative impacts they created. For my thesis, I validated the hypothesis that companies do not have a sustainability strategy for the sake of good but because of regulation; and, how much impact they can have (positive or negative) because of their size and weight in our daily life. The blurriness of their reporting was appalling, due to of a lack of knowledge but mainly because of a lack of intentionality to do better.

This is where I knew that I wanted to work in this field: it took us centuries to get to the financial accounting regulations of today (far from being perfect), so the potential for sustainability was unlimited, all was yet to be created.

Let Us Introduce You to This Topic...

Impact transparency to avoid Greenwashing and Impact Washing

Every single human organization has negative environmental and/or social impacts, and that some of them intentionally try to create positive impacts. The good thing is, we see more and more of those!


In order to transform our economy, the real challenge we collectively have is to have access to a clear view of the net impact of all organizations. To have access to credible and transparent impact data for each organization and enterprise in order to make impactful choices in terms of spending, investment and lending.


A Mandatory Impact Balance Sheet

It will soon become mandatory, for EVERY ORGANISATION, to publish their impact statement alongside their financial statement. 


Based on a universal, transparent and holistic standard (similar to the IFRS), those annual impact statements will give a true picture of the net environmental and social impact of any organization – private, public, SME, multinational, for profit, NGOs, States, Cities, etc.

Paul's Reading List

Where ESG fails

Harvard Business School luminaries Michael E. PorterGeorge SerafeimMark Kramer

Here is an introduction article that clearly demonstrates how the Impact Economy is today the biggest opportunity. In this research paper, you will understand where ESG (traditional responsible finance) approach fails. And how a better model exists, based on really integrating impact elements in the enterprise business model.

It is only through genuine transparency that changemakers can make the right choices and massively channel capital (spend, invest and bank) towards those organizations minimizing their negative impacts and growing their positive impacts.

It is only through genuine transparency that we can avoid greenwashing and impact washing.

Capital and Ideology

Thomas Piketty

Can a system change? Yes it can. And this book – long read but worth the time investment – explains how, through history, socio-economical systems evolved and why.

This is one of the most important books of the century: at once a retelling of global history, a scathing critique of contemporary politics, and a bold proposal for a new and fairer economic system.

The Green New Deal

Jeremy Rifkin

This is another approach to a needed paradigm shift. An urgent plan to confront climate change, and how to transform the American economy, and create a green post-fossil fuel culture.

Today’s Source of Money Creation

Richard Werner

Not only Mr, Werner has fully understood how our economy and financial markets work, but he has also has the courage to speak up and clear. This is not what you learn in school! And you should understand this…

Velina's Reading List

The basics: Impact Management Project

Impact Management Project

To become an expert greenwashing buster, you need to get your basics straight. All actions, conscious or not, to disrespect the principles of impact, is greenwashing. 

The Impact Management Project has beautifully de-jargonized those principles. It is the most advanced initiative for standardization of impact across all sectors, applicable to the whole spectrum of impact (positive AND negative) from impact project holders as small as local NGOs, to big corporates and ESG asset management firms. The plus: the incredible database of case studies, including ours, about ESG and CSR limits, which are often used to a greenwashing end:


The Good Investor: A Book of Best Impact Practices

The Good Investor

In the context of investment specifically, The Good Investor is a guide which unwinds all the steps of a classic investment process, in which best practices to become an impact investor are explained and illustrated. If you analyze an investment process and find out that it does not fit with the practices in the book, there is a chance that it results in greenwashing. The end of the book is a perfect summary of classic impact assessment theory with the explanation of a Theory of Change, which is a must to debunk impact assumptions.


Unilever's Sustainability Myth

Daphné Dupont-Nivet

When it comes to greenwashing, I sometimes feel like an investigator trying to separate meaningful, truthful, precise, consistent, significant, exhaustive and relevant information from what’s not, and what inspires me, is investigative journalism. I enjoy reading reports such as the following to learn about the misfunctioning of a specific sector, an then compare it to how the company disclosed information about it.

How Everything Can Collapse

Pablo Servigne & Raphaël Stevens

I’d like to open the discussion on the risks of impunity when it comes to greenwashing practices, by introducing a book explaining how our economic and political decisions, as well as our human nature, and developed world society has led us to an inextricable situation, with a climate crisis growing by the day. Of course, companies with greenwashing are not the sole responsible, but they have a significant role to play in shaping the future of the living. It is in French but expected to be translated soon thanks to its success.

About the Author

Paul: With civil engineering studies and a music degree in hand (cello), my first career was in the entertainment business. Specialized in musicals as a performer, (Les Misérables, Gala, etc.) I also got involved in theater, television and movie production. At one point, I went back to school and did my MBA at HEC. I then launched my first tech start-up that I brought public on the TSX in 2000. Since then, I got involved in 3 other going public transactions, raised over $45M, did around 12 M&A transactions. I led innovative multi-disciplinary teams in Canada, France, UK and Mexico, always involved in disruptive technology development.

Early in my entrepreneur career, I had to deal with the world of finance, and rapidly felt that something was wrong about our system.  All of it led me to founding impak Finance, which mission is to bolster the growth of the impact economy. 

Velina: Velina has been involved with impak Finance since 2017 for the development of its impact rating methodology and offer, as well as the supervision of the impact analysis team.

Velina started her sustainability career as advising companies in the establishment of their CSR strategies and verification of their extra-financial results. As a member of Deloitte Sustainability Services team in Paris, among several other international mandates, she carried out the extra-financial audit of four responsible investment funds of AXA IM, who were first to make these types of audit results public.

Her specialization in impact measurement materialized with her implication in a community development NGO in South India in 2014 by designing the impact strategy and measurement framework of the project.

From London, Velina then worked in parallel for the Fairtrade initiative as an accredited auditor and for Investing for Good (IFG), a leading impact investing intermediary and an impact consulting firm. At IFG, she led impact evaluations and consulting projects to design and implement impact management frameworks and processes for social businesses, NGOs and investment funds, before crossing path with Impak Finance and moving to Montreal.

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