EXCLUSIVE – Climate indices, a “greenwashing” machine

Posted on Sep 21, 2021 at 7:00 AMUpdated Sep 21, 2021, 7:09 AM

What if sustainable finance was a lure? “Green is beautiful” and ESG funds, which pride themselves on respecting environmental, social and governance criteria, have become the main driving force behind European asset management. But in fact, “the investment industry, despite its promises, is doing little to reallocate capital in a direction and in a way that could inspire companies to contribute to the climate transition”, assert researchers from Edhec Business School.

In an unprecedented study *, the Scientific Beta chair, known for its expertise in market indices, denounces widespread “greenwashing”. “The vast majority of institutional funds and mandates that claim to have a positive impact on the climate are exposed to significant and obvious greenwashing risks, in large part because they display attractive climate metrics in their portfolios through the implementing erroneous strategies ”, write Noël Amenc, Felix Goltz and Victor Liu.

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