Central Bank warns of eco investment ‘greenwashing’

The report added: “We see risks to this successful transition arising where strong investor demand is met by the supply of financial products purporting to be sustainable in nature but which in reality do not meet environmental standards, a practice known as ‘greenwashing’.”

“The market for ESG ratings and other assessment tools is currently unregulated and unsupervised,” ESMA said.

“This raises the possibility that investors are misled into buying financial products that do not meet the environmental standards investors expected when making their investment,” it said. “Firms need to be vigilant to avoid this risk, so that investors’ best interests are protected and the reputation of the emerging concept of green finance is not damaged.”

irishtimes Central Bank warns of eco investment ‘greenwashing’