evaluate the role of stakeholders in greenwashing using the following case study: Green Bonds: How Ford$$s Electric Cars Won the Race Against SEC Regulation" The automotive industry is rapidly transitioning to sustainable energy, with Ford launching one of the largest IPOs on Wall Street and six carmakers and thirty governments committing to selling zero$-$emission vehicles by $2040.$ This shift requires substantial investments, and green bonds could be part of the solution. Ford intends to spend $$30$ billion on electric vehicles and issued $$2\mathrm{.}5$ billion of green bonds to finance the project, making it the biggest green bonds issuance ever completed by a US corporation.

Currently, there is no definition of green bonds under US law, so issuers can self$-$label their bonds as green or provide a third$-$party opinion certifying their compliance with nonbinding international guidelines, such as the Green Bonds Principles $($GBP$).$ Under the GBP$,$ green bonds' proceeds must be used for eligible green projects and respect core principles related to the use of proceeds and reporting, such as transparency in the selection and management of the green projects and annual reporting. Ford chose this third$-$party certification option in compliance with the GBP$$s standards.

A significant benefit of third$-$party certification is that it allows investors to externalize their due diligence costs more easily. This is especially relevant because an increasing number of institutional investors, such as BlackRock, integrate sustainability into their investment decisions to reduce systemic risk and attract or retain investors. This trend creates considerable demand for green bonds, with an average market growth of $60\%$ since $2015.$

Green bonds are also an opportunity for issuers with credit risk to access low$-$priced debt. Ford's offering exemplifies this "greenium" because the green bondholders will not benefit from tax exemptions or higher priority in cases of insolvency but have accepted to receive lower interest rates. However, some investors have questioned the transparency of green bonds, as the lack of binding standards on the meaning of "green" permits "greenwashing" through the issuance of self$-$labeled green bonds.

Improving the transparency of green bonds will require the introduction of specific disclosure requirements. SEC Commissioner Allison Herren Lee clarified that there is no general obligation to "reveal all material information." SEC Chair Gary Gensler wants to reform the existing guidance on climate risk disclosure by developing mandatory disclosures on climate risks before the end of the year. The SEC should also provide a single and binding definition of "green bonds," which would preserve the market's confidence in the ability of green bonds to fight climate change by creating enforceable minimum standards.

The SEC historically deferred to the private accounting industry to set standards for financial statements. The creation of the International Sustainability Standards Board, which will develop sustainability disclosure standards, could provide a safe track for future issuers and investors.