Fears over greenwashing rise 20% over three years

Fears of greenwashing have increased among investment managers, research suggests.

Some 74% of investment managers in a study fear greenwashing accusations – a 20% increase over three years.

Research in Finance, which carried out the study, said there was a “cloud of confusion” for investors around the topic.

The firm surveyed over 200 discretionary fund managers and investment advisers and found that inconsistencies between fund managers’ definitions around sustainable and ethical investing have led to a lack of comparability and clarity. 

“For two consecutive years nearly three-quarters of intermediaries’ have expressed concerns of greenwashing, only adding to the cloud of confusion that currently hangs over responsible investing,” says the report, which is called ‘Responsible investing: What’s holding us back?’.

Over a third of the respondents agreed there was a lack of responsible-investing research tools and data sources, acting as a further deterrent for engagement.

But the report also argues that the future looks bright for responsible investing in the medium term. For example, the UK’s Financial Conduct Authority will launch the UK Sustainability Disclosure Requirements in Autumn 2024 to address some of the concerns that firms are making exaggerated or misleading sustainability claims about their investment products, which “will help define the market more concisely”. 

© 2023 funds europe

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