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The colloquial term for this phenomenon, particularly as it relates to sustainability, is greenwashing, and it’s far from novel. Here’s a quick rundown: Greenwashing is a practice used by businesses to represent themselves as more sustainable than they truly are. Greenhushing refers to a company’s refusal to publicize ESG information.
Finally, firms must ask whether the client would opt for products or instruments that take into account the SFDR’s principaladverseimpactindicators on sustainability factors. Around 43% of European open-ended funds and ETFs are currently classified as Article 8 with 8% termed as Article 9.
But that will take time and, in the meantime, the authorities are focusing on other ways to limit and expose ‘greenwashing’. The FCA is also able to use its existing rules to fine firms that are guilty of ‘greenwashing’, but so far has focused on the retail market. Negative externalities (PAIs) and the Taxonomy. US developments.
The European Supervisory Authorities (ESAs) have issued a Call for Evidence to stakeholders on greenwashing. . The ESAs have also asked for any available data to help them gain a more concrete sense of the scale of greenwashing and areas of particularly high risk. . More time needed .
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