Green Finance Briefing: Greenwashing on Wall Street, and climate tech stocks outperforming the market
- Regulators have started to investigate misleading ESG claims at big banks, signaling that they’re paying close attention to the wave of greenwashing happening in finance.
- Elsewhere, climate tech stocks continue to outperform the market, and UN Secretary General Antonio Guterrez bemoans the counterproductive attitude of the finance industry towards climate change.
Greenwashing on Wall Street
Regulators are cracking down on misleading claims at big banks, signaling that they’re paying close attention to the wave of greenwashing happening in finance. Goldman Sachs is the latest target of an SEC investigation, following the greenwashing probes into BNY Mellon and DWS earlier this year.
ESG is the latest fashion trend to take over Wall Street – ‘green’ products are in this season, and many banks responded to the increasing demand by offering ‘sustainable’ investments.
I’ve argued before that ESG is currently more about the hype than actual value-aligned investing. Despite growing increasingly popular, the unregulated world of sustainable investments is not always what it’s cracked up to be.
Initially, the pressure was coming from institutional investors that were looking for more environmentally friendly ways of investing, according to financial regulation expert Amy Lynch, but that has now expanded and spun over into the retail sector.
“It’s the hot new thing, and everyone’s trying to get in and profit off of it,” she said.
But considering there are no rules, how did we get to greenwashing investigations?
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