Greenwashing ‘rife’ according to industry poll

66% of those surveyed highlighted a lack of ESG understanding at fund groups

Greenwashing at investment management companies is “rife”, according to a poll of delegates attending Expert Investor’s 2019 ESG Congress in Berlin.

A majority of attendees said they felt it was a major issue facing the industry, and a further 23% of delegates said they felt while most fund houses are taking the issue of ESG seriously, some major players are still greenwashing. Just 11% of those polled believed that almost all fund groups take ESG investment seriously.

Audience participants in the live poll said that environmental, social and governance issues mattered to them and their clients.

An overwhelming number said that the UN’s Sustainable Development Goals (SDGs) are interesting, to different degrees; with 7% stating they are ‘vital’ for ESG investment, 51% saying ‘important’ and 37% ‘interesting’. Just 5% thought that the SDGs were irrelevant for ESG investment purposes.

A lack of common ESG standards has exacerbated the problem of greenwashing, the audience heard.

Joe McGrath, editor of ESG Clarity and a speaker at the Congress, told the conference that definitions such as impact investing are commonly misused for commercial purposes.

He said while there have been some “genuine efforts” by companies to deliver funds with meaningful impact, the ambiguity of the term has been harnessed by some ruthless marketers.

McGrath cited a report by the International Monetary Fund which warned that a lack of consistent methodologies and ESG standards could be harming trust in sustainable investing across the board.

The Global Impact Investing Network (GIIN) defines impact investing as investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.

GIIN found that the current size of the global impact investing market is $502bn (€453bn) in assets under management as of the end of 2018.

It was the first rigorous analysis and estimate of the size of the impact investing market.