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Switzerland’s Federal Department of Finance (FDF) announced today that it will proceed with plans to propose regulations to address greenwashing in the financial sector, including investment and disclosure rules for financial products using labels such as ‘sustainable,’ green,’ or ‘ESG.’
Sacha Sadan, FCA’s Director of Environmental, Social and Governance, said: “Confirming the new anti-greenwashing guidance and our proposals to extend the Sustainability Disclosure Requirements and investment labels regime are important milestones that maintain the UK’s place at the forefront of sustainableinvestment.
The Australian Securities & Investments Commission (ASIC) Australia’s corporate, markets, and financial services regulator, announced today that it issued an infringement notice to superannuation fund promoter, Future Super, over alleged greenwashing by the company in a social media post.
Switzerland’s Federal Council announced today that it will hold off on regulating greenwashing in the financial sector, allowing instead for the industry to monitor itself, following progress made by the sector’s associations in developing and implementing self-regulatory provisions.
Regulators, and in particular the EU, have increased the level of disclosure as regards sustainableinvesting through the SFDR/Taxonomy/NFDR/CSRD etc. Firstly transparent disclosure makes it harder for investment managers to “greenwash” their products and fool investors that they are following altruistic goals.
Research by the European regulator shows that ESG-related named fund s attract more inflows , raising concerns about potential greenwashing. Consistency across documentation Additionally, the report found that the language used in fund documentation varies significantly based on type.
Authorized certifiers review documents and inspect fields to ensure farmers and products meet these rigorous standards. And 40 years of published scientific research supports the many benefits of organic agriculture on human health, soil health, and the ecosystem.
The EU watchdog plans to ramp up scrutiny of sustainable financial products, warning providers not to make “unsubstantiated” claims. The European Securities and Markets Authority (ESMA) has developed a new tool that will enable it to better identify cases of greenwashing in the investment management industry.
FCA-hosted TechSprint aims to harness technology innovation to outpace adverse impacts of greenwashing in financial services. At yesterday’s culmination of the Global Financial Innovation Network’s (GFIN) first Greenwashing TechSprint , awards were presented based on different criteria.
Transition of Sustainable Finance Disclosure Regulation to a labelling regime will be ongoing and multi-faceted. Garrault highlighted discrepancies between SFDR and the EU Taxonomy, such as the former defining sustainableinvestments and the latter more specifically identifying environmentally sustainableinvestments.
The SFAC compiled the report after it assumed responsibility for creating a green taxonomy after the Canadian Standards Association, a non-profit industry body, failed to reach consensus among fossil-fuel and investment-industry representatives in 2020. On this point, the report is weak, and more work needs to be done.
Asset managers should expect and prepare to be challenged on the sustainability credentials of their ESG-labelled funds as financial markets watchdogs clamp down on greenwashing, according to regulatory experts. . The SEC has also recently fined BNY Mellon Investment Adviser US$1.5
The growing use of ESG-related language in fund names and documentation without transparency and underlying evidence increases greenwashing risk, ESMA warned.
The European Supervisory Authority (ESA) proposed creating two fund categories, one for sustainable funds and another for transition funds, while the European SustainableInvestment Forum (Eurosif) suggested introducing three categories. ESMA is expected to publish further SFDR guidance and a Q&A document next year.
Anti-greenwashing rules and guidance may become “diamond standard”. Anti-greenwashing guidance proposed by the UK Financial Conduct Authority (FCA), as well as the promise of extending the finalised Sustainability Disclosure Requirements (SDRs) to pension products, has been welcomed by the investment industry.
In the publication, ESMA acknowledged that “considerable progress has been achieved in building the EU Sustainable Finance regulatory framework” already, but noted that their remains further room for the evolution and maturation of the framework, with its recommendations setting out long-term improvements to that end.
Further, a lack of transparency around why a fund has been re-labelled as sustainable and the impact the new label has on the fund’s environmental-related characteristics or performance can ignite greenwashing concerns. Asset owners have told ESG Investor they will continue to closely scrutinise funds with new sustainable labels.
Between January 2020 and December 2021, the EU watchdog identified 191 European companies involved in 933 misleading communication incidents – 70% of which involved greenwashing. However, ESMA’s guidelines also require a more general alignment with environmental or social characteristics, or a sustainableinvestment objective.
One such, unheard of a few short years ago, is “greenwashing”, the practice of dressing up products, services or investments as being in full conformity with ESG principles – in contradiction of the underlying reality. It may be a bit strong to say firms are fearful of being accused of greenwashing. topped 90% of the fund.
In this paper, we describe our process for assessing ESG-labeled bonds and show that, by systematically applying this framework, investors can help set a gold standard for the market, avoid surprises from controversy and greenwashing, and potentially generate more alpha over time. Less Greenwashing Can Mean More Alpha.
Protected status for ESG investment products could mark the beginning of the end for greenwashing for UK investors. Before long, any asset manager thinking of slapping a ‘sustainable’ or ‘ESG’ label on its investment products for UK clients should think twice – at least. It thinks there is a problem about greenwashing.”.
Despite growing investor appetite, it is increasingly recognised by investors, intermediaries and regulators that the impact investing market is being held back by a lack of consensus on its definition, beyond the broadest of terms.
The European Commission’s latest clarifications on taxonomy-alignment disclosure rules under the Sustainable Finance Disclosure Regulation (SFDR) are “painful” and require further explanation, according to legal and industry experts speaking to ESG Investor. . The content of this briefing is not exhaustive and does not constitute new policy.
Although the EU Taxonomy and SFDR were designed to increase transparency and reduce opportunities for greenwashing, it’s still early days, and there is much work to do. When it comes to sustainableinvestment exposure, asset managers should explain how they calculate it. What matters is transparency,” said Bioy.
The Commission has finally given us clarity on the general orientation of the RTSs,” says Victor van Hoorn , Executive Director of the European SustainableInvestment Forum (Eurosif). . The finalised DR document outlines all 13 RTSs and provides an explanatory memorandum.
In this article, I’ll summarise key events defining 2022 and present four sustainability trends that will prepare you to create an impact in 2023. 2022 Sustainability Summary. In 2022, the voice against “greenwashing” practices was clear and loud. Sustainability trends 2023: Net-Zero roadmaps.
Comparability across jurisdictions will: Offer the most cost-efficient solution for companies committed to transparent and robust reporting and minimize the opportunities for greenwashing. Provide the clearest possible picture to investors seeking the world’s most sustainable companies across markets and geographies.
“A number of asset owners have set their decarbonisation targets and are now realising they have to also support the transition and need to incorporate this into their sustainableinvestment strategies,” Nazmeera Moola, Ninety One’s Chief Sustainability Officer, tells ESG Investor. .
While most of the funds’ documentation analysed explicitly cite exclusions relating to fossil fuels and controversial weapons, none outright exclude companies linked to deforestation in their screening process.
This interest is driven by new climate science findings and the strong performance of sustainableinvestments: In 2023, sustainable funds outperformed traditional funds , delivering an overall return of 12.6%, which is almost 50% higher than that of traditional funds. trillion in 2022, a 15% decrease from 2020.
In addition, the lack of standards in this area increases the risk of ‘greenwashing’ or misallocation of assets and could lead to a lack of trust in ESG ratings or in the data products’ robustness or relevance. sustainability-related disclosures for asset managers, including ‘greenwashing’, and. IOSCO regulatory recommendations.
This surrender was part of a wider pullback, as banks, investment funds and asset owners axed billions of dollars from sustainableinvestment funds and reined in marketing excesses. More than US$8 trillion removed from sustainableinvestment tally. sustainableinvestment, to US$8.4 In the U.S.,
ESMAs guidelines on fund names came into effect in November and are expected to serve as an interim anti- greenwashing measure ahead of a more expansive and far-reaching update to the SFDR that will be put forward later this year. Meanwhile, ESMA is expected to publish further SFDR guidance and a Q&A document later this year.
The regulatory fatigue is palpable among asset managers,” Hortense Bioy, Head of SustainableInvesting at Morningstar Sustainalytics, told ESG Investor. In addition, in June, ESMA introduced a tool enabling to better identify cases of greenwashing in the investment management industry.
The regulatory fatigue is palpable among asset managers,” Hortense Bioy, Head of SustainableInvesting at Morningstar Sustainalytics, told ESG Investor. In addition, in June, ESMA introduced a tool enabling to better identify cases of greenwashing in the investment management industry.
A decision by the CFA Institute to rebrand its Certificate in ESG Investing as the SustainableInvesting Certificate provoked head-shaking, shoulder-shrugging and hand-wringing this week (sometimes all three, simultaneously). But names and labels can matter, especially when applied to investment products.
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