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EU sustainable funds invest in major polluters
EU-regulated "sustainable" funds invest billions in polluting companies, including fast fashion and fossil fuel firms, misleading investors about their environmental impact.
Ajit Niranjan, Giorgio Michalopoulos, and Stefano Valentino report for The Guardian.
In short:
- EU-regulated sustainable funds have invested $18 billion in the 200 biggest polluters.
- Funds marketed as environmentally-friendly include significant investments in high-emission sectors.
- Campaigners call for stricter regulations to prevent greenwashing and misleading labels.
Key quote:
"Pension savers and the general public are being misled when it comes to sustainable finance."
— Lara Cuvelier, sustainable investment campaigner at Reclaim Finance
Why this matters:
The allure of sustainability has attracted a significant number of investors seeking to align their portfolios with their values. However, the lack of stringent criteria and transparency within the EU's regulatory framework has allowed companies with questionable environmental practices to slip through the cracks. Fast fashion, notorious for its massive carbon footprint and waste generation, and fossil fuel firms, the main contributors to climate change, are among the top beneficiaries of these "sustainable" funds.
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Credit: Maxim Hopman/Unsplash
Investment firms face challenges under new EU sustainable rules
The EU's new regulations for sustainable investing will force many investment firms to either rename thousands of funds or divest $40 billion in assets.
In short:
- The European Securities and Markets Authority (ESMA) has introduced rules to clarify the criteria for sustainable investment funds.
- Funds labeled as ESG, SRI, or similar will no longer include high-emission industries unless they meet specific environmental standards.
- Major companies like TotalEnergies may be divested from many ESG funds, affecting $3.5 billion in investments.
Key quote:
"Investors should know exactly what they are getting in their mutual funds."
— Andrew Behar, CEO of As You Sow
Why this matters:
Ensuring transparency in ESG funds is crucial for maintaining investor trust and encouraging genuine sustainable investments. As financial markets adapt, the clear labeling will help investors make informed decisions aligned with their environmental values.
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Newsletter
U.S. quest for minerals leads to a remote nation surrounded by adversaries
China dominates the flow of raw materials for climate-friendly technology. Now the U.S. is hatching a plan to find other sources.
Newsletter
Photo by Maxim Hopman on Unsplash
ESG investing and corporate fear of climate risk disclosure
Pro-business politicians embraced ESG investing — until the SEC suggested companies should report their full emissions.
Image by Nattanan Kanchanaprat from Pixabay
Your 401(k) plan may be worsening climate change, expert says
As worried about climate change you might be, it can be tricky, if not impossible, for you to consider the environment in your 401(k) plan. Here's why.
Photo by Louis Velazquez on Unsplash
House Republicans fail to override Biden’s ESG veto
The GOP-led chamber on Thursday failed to override President Biden’s first veto in a new vote, falling short of the necessary two-thirds majority.
Climate change holds risk, but also opportunity
If insurance executives cannot see any projected value created by an environmental, social and governance policy, maybe they need to reconsider their approach, a Bermudian climate risk expert has said.
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