We’ve gotten pretty good at spotting greenwashing. Regulators are cracking down. Consumers are sceptical. Media outlets (including this one) are calling out misleading environmental claims.

But there’s a parallel phenomenon that’s getting almost no scrutiny: impact washing. Companies are making vague, unsubstantiated claims about their social impact, and the bar for evidence is essentially nonexistent.

What impact washing looks like

Impact washing is when an organisation claims to be creating positive social impact without meaningful evidence. It takes many forms.

A company sponsors a charity event and claims it’s “committed to community development.” A tech firm provides a handful of internships and declares itself a champion of social mobility. A bank creates a small grants program and positions itself as a leader in impact investing. A consultancy plants some trees and claims it’s contributing to reconciliation.

None of these things are inherently bad. Some are genuinely valuable. But the gap between the modest reality and the grandiose claims is often vast, and nobody’s checking.

Why it matters

Impact washing matters for the same reason greenwashing matters: it degrades trust, distorts markets, and lets organisations off the hook for real change.

When every company claims to be making social impact, the term becomes meaningless. Organisations that are genuinely investing in social outcomes get drowned out by the noise of performative claims. And consumers, investors, and policymakers can’t tell the difference between genuine impact and marketing.

It also diverts resources. When a company invests more in communicating its impact than in creating it, something is fundamentally wrong. But in the absence of scrutiny, the incentive is to spend on marketing rather than on programs.

The double standard

Here’s what frustrates me. In the environmental space, we now have mandatory reporting frameworks, ACCC enforcement against misleading claims, and growing investor scrutiny of climate commitments. The bar for environmental claims is rising.

In the social impact space? Almost nothing. A company can claim to be “lifting communities out of poverty” with zero evidence and face no consequences. It can publish an impact report full of vanity metrics and receive nothing but praise. It can position itself as a social impact leader based on activities that are trivially small relative to its revenue and influence.

The standards are completely asymmetric. Environmental claims face increasing scrutiny. Social impact claims face almost none.

The measurement gap

Part of the problem is that social impact is genuinely harder to measure than environmental impact. You can measure tonnes of CO2 with reasonable accuracy. Measuring whether a program “improved community wellbeing” is inherently more complex.

But difficulty doesn’t excuse avoidance. We have well-established methodologies for social impact measurement. Logic models, theories of change, outcome indicators, counterfactual analysis — these tools exist and they work. The problem isn’t that measurement is impossible. It’s that companies aren’t being required to do it.

If a company claims to be creating social impact, it should be able to answer three questions:

1. What specific outcome are you trying to achieve?
2. What evidence do you have that your activities are contributing to that outcome?
3. Would that outcome have occurred anyway, without your intervention?

Most impact washing falls apart at question two.

What should change

We need social impact claims to face the same scrutiny as environmental claims. Specifically:

Regulatory attention. The ACCC should apply the same principles to social impact claims as it does to environmental claims. A company that claims to be “transforming communities” with no evidence should face the same consequences as one that claims to be “carbon neutral” without a credible plan.

Reporting standards. As ESG reporting frameworks evolve, social metrics need the same rigour as environmental ones. The current state — where companies can self-report social impact using whatever metrics they choose — is inadequate.

Investor scrutiny. Impact investors need to be more demanding about evidence. A fund that claims to generate social alongside financial returns should be able to demonstrate those social returns with the same rigour it demonstrates financial performance.

Media scrutiny. Journalists (myself included) need to ask harder questions about social impact claims. When a company announces a partnership with a charity, the questions should be: what outcomes will this produce, how will they be measured, and what happens if the outcomes aren’t achieved?

The awkward conversation

I know this argument will be unpopular in some quarters. People in the social impact space tend to welcome any corporate interest in social outcomes, on the theory that some engagement is better than none. I understand that instinct.

But if we don’t hold social impact claims to a reasonable standard of evidence, we create a world where “social impact” is just another marketing label. Where real efforts to address disadvantage, inequality, and community challenges are indistinguishable from corporate PR campaigns.

That world doesn’t serve anyone well — least of all the communities that corporate social impact programs claim to help.

The greenwashing crackdown showed that accountability improves quality. The same would be true for impact claims. Scrutiny isn’t the enemy of social impact. It’s the precondition for it.