01 Sep 2021

ESG investment and green washing – Myth and reality

Given the complex interlocking issues surrounding sustainability, combined with a “green rush” of funds moving into the space, questions have been raised about the quality and transparency of some of the products that are labelled “green” or “ESG”. Concerns have also been raised about the clarity and alignment of the ready-made ESG ratings provided by some consultants and ratings companies.

This edition looks at the myth often promoted by raters and some fund managers that there exists a universal and decision-ready rating of sustainability fitness. While noting that sustainability analysis is at least as complex as financial analysis, it also points out how ESG metrics can influence public policies.