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Despite appearances, sustainableinvestments have quietly had a great year. Given the poor performance of green energy stocks and the chorus of opposition against anything viewed as “woke,” it’s easy to get lost in the narrative that the shine has worn off sustainableinvesting. But that’s not what I’m seeing.
Ashley Thomson, Global Witness’s US Senior Policy Advisor Similar concerns have also been raised by Tariq Fancy, BlackRock’s former sustainableinvestment chief, who criticised the firm for “misleading investors” by using the ESG label, calling it a “dangerous placebo”. JBS is widely regarded as an ESG pariah.
Two-thirds of funds in the EU labelled with sustainable or ESG-related terms may need to sell assets or change their names to align with new anti-greenwashing rules, with stock divestments of as much as $40 billion if all were to keep their names, according to a new report released by investment research firm Morningstar.
Tariq Fancy, former BlackRock chief investment officer for sustainableinvesting, in a recent TEDx talk called fossil fuel divestment a placebo, equating it to giving wheatgrass juice to a cancer patient. These comments also show that there is a massive skills gap in the sustainableinvestment industry.
Slow-to-change investors and greenwashers in the business community will lose their cover to continue propping up the fossil fuel economy. And citizens and consumers will have the kind of granular information they need to more effectively target the decision-makers and brands standing in the way of a sustainable future.
EE: There’s a general concern about greenwashing and the dissonance between what many companies say they believe about ESG issues and what they are actually doing. Do you feel corporate greenwashing has increased or decreased from the 1970s and ’80s? Both divestment and shareholder action have a role.
Last month, the Canada Pension Plan Investment Board (CPPIB) released its 2022 Report on SustainableInvesting , highlighting its commitment to be net-zero by 2050 and its engagement strategy to pressure companies to manage climate risks.
Similarly, 69% of investors reported that they would increase their investments in companies that successfully manage sustainability issues relevant to the business’s performance and prospects, and 67% would increase investment in companies that change their business conduct to have a beneficial impact on society or the environment.
EU markets regulator the European Securities and Markets Authority (ESMA) released its finalized guidelines on ESG Funds’ Names earlier this year, aimed at protecting investors from greenwashing risk, and detailing minimum standards and thresholds for funds using ESG and sustainability-related terms in their names.
Additionally, the report found that the “sea change in attitudes towards ESG and sustainableinvestment approaches” has extended to real assets, with 93% of investors considering ESG factors in real asset investment decisions, including 17% who consider the matters as “critical and deciding” factors.
Renaming trend may lead to a short uptick in greenwashing, but ultimately will accelerate the path to net zero and offer sustainable investors more choice. The decision to rebrand a fund often raises eyebrows, with investors “intuitively suspicious” of the activity due to greenwashing concerns among others.
The framework will form part of the UK’s Sustainability Disclosure Requirements (SDRs), the UK’s equivalent of Europe’s Sustainable Financ e Disclosure Regulation (SFDR). A number of asset managers have revised the categorisation of their funds under SFDR, in light of further regulatory guidance, to avoid claims of greenwashing. .
Article 9 funds are considered the most sustainable, requiring portfolios with 100 per cent sustainableinvestments. The advantages of Article 9 funds lie in their ability to provide clear signals to investors regarding their commitment to sustainability.
David Byrns, Portfolio Manager at American Century, explains why transition investing is fundamental to achieving net zero. While global sustainableinvestments reached US$30.3 It has proved the high-level economic logic that more sustainable businesses are more valuable,” explained Byrns.
SustainableInvesting – Greater Scrutiny. The increased scrutiny over greenwashing is necessary, and will provoke the market to favor substance over style. The divestment movement will wane. Jonas Rooze, manager of sustainability and climate research. In China, prices are languishing below $10 per ton. -
Ninety One has been among the first joiners of the World Benchmarking Alliance’s call on asset managers to review their approach to sustainableinvesting to ensure it does not unintentionally lead to divestment from EMs. Closing the gap Both public and private credit will be needed to address financing needs, Christ explained.
For investors, engaging with investee corporates in the transition process has replaced the blunt tool of divestment as a means of decarbonising portfolios. “But to actually implement it, we need to have methodologies in place and a change in approach.”. Engagement ring.
With nature more broadly, there are further layers of complexity,” said Eric Nietsch, Head of SustainableInvesting, Asia, Manulife Investment Management. You have to bear that in mind when considering your investment decisions,” she said.
The regulatory fatigue is palpable among asset managers,” Hortense Bioy, Head of SustainableInvesting at Morningstar Sustainalytics, told ESG Investor. Greater impact of the regulation has yet to be seen, as we anticipate a wave of fund rebranding and divestments,” she said.
The regulatory fatigue is palpable among asset managers,” Hortense Bioy, Head of SustainableInvesting at Morningstar Sustainalytics, told ESG Investor. Greater impact of the regulation has yet to be seen, as we anticipate a wave of fund rebranding and divestments,” she said.
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