Recent scrutiny of ESG disclosure has accentuated growing apprehensions regarding selective or misleading corporate reporting practices, commonly labeled as ‘greenwashing.’ This deceptive behavior not only erodes market integrity but also misguides investors. This paper addresses the urgency of preventing and governing inaccurate ESG disclosure, identifying critical research gaps, such as the absence of systematic approaches to detect misleading reporting, inadequate comprehension of corporate motives and influencing factors, and insufficient governance measures. The study proposes a nuanced approach to prevent and govern ESG disclosure, scrutinizing various manifestations of inaccurate reporting, exploring root causes, and suggesting potential countermeasures. Stressing the need for collaborative efforts among regulators, investors, and the public, it advocates for the establishment of robust monitoring mechanisms. The paper calls for intensified empirical research on misleading ESG disclosure and recommends a framework to standardize and enhance ESG disclosure quality, thereby fortifying financial market stability.