What is greenwashing and why is it a problem? | EuronewsWith ransomware and other cyber threats top of mind for most in the c-suite these days, a question frequently raised is whether a particular organization is a target for hackers. Of course, nowadays, any organization is at risk of an attack, but the question is whether some organizations are targeted more than others. A recent Insurance Journal article discusses a paper published in September 2021 that identifies a factor that could elevate the risk of being targeted, a factor many in cyber might not have expected, “greenwashing.”

Around this time of year, many offering commentary on cybersecurity issues (including us!) postulate on what lies ahead for the year, trends to watch, and emerging risks. For example, Embroker Insurance Services published comprehensive report in December 2021, outlining a wealth of cyberattack statistics and trends, including a view on the types of organizations most vulnerable to cyberattacks:

  • Banks and financial institutions
  • Healthcare institutions
  • Corporations
  • Higher education

It is not difficult to see why entities in these industries (and others) are thought of most frequently. They typically have thousands, sometimes millions of customers, many locations, hundreds of employees, and lots and lots of personal information. They maintain increasingly complex information systems amid an ever-expanding regulatory environment, sometimes without commensurate budgetary support.

However, according to the University of Delaware paper cited by the Insurance Journal, an organization’s “corporate social performance” or “CSP” can affect its likelihood of being subject to a cyberattack. Specifically, according to the paper, organizations that have CSP strengths outside of their core business with a less than stellar record in other areas are at increased risk of a data breach.

“The increased likelihood of breach for firms with seemingly disingenuous CSP records suggests that perceived “greenwashing” efforts that attempt to mask poor social performance make firms attractive targets for security exploitation.

An organization’s CSP, as measured by its environmental, social and corporate governance (ESG) rating, is an emerging metric for evaluating organizations, even if its impact on corporate financial performance (CFP) remains unclear.  For example, a proposed rule issued in October 2021 by the Department of Labor would help pave the way for increased consideration of ESG factors by plan fiduciaries when selecting investment options for retirement plan assets.

The greater attention to CSP and ESG shared by many, however, evidently may include a segment of people willing to take more extreme measures to achieve their goals. In 2008, according to reports, fires that severely damaged at least five luxury homes in a Seattle suburb were suspected to have been started by “ecoterrorists,” angry that developers marketed the subdivision as “built green.” This is not unlike the motive identified by the Univ. of Del. paper for launching cyberattacks against certain organizations – that is, stopping organizations from using ESG to appeal to customers without also making meaningful changes to core business practices.

Of course, it is not clear whether the paper has captured what motivates cyberattacks more often than not, or whether in fact organizations engaged in greenwashing are being targeted at a higher rate than others, if they at “targeted” at all. At the same time, it is certainly not unprecedented for individuals to take extreme measures to advance their desires for social, environment, and other changes. Either way, organizations should be considering all potential risks and appropriately weighing them when developing their information security policies, incident response plans, and other safeguards for protecting systems and information.

Photo courtesy of Euronews.com

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.