COP 26 or Flop 26? ESG Funds: “Greenwashing” or Impact Investing?

With the UN climate change conference, COP26, having come to a close last month we look at the challenges facing ESG (Environmental, Social and Governance factors) investors. It is debatable whether COP26 was a success or not. On the one hand commitments were given by 140 countries for net-zero targets, 40 countries have pledged to move away from coal and multi-nationals have shown “genuine” support to really help towards a global change. However, the other side would claim that not enough was achieved during COP26 and that talking about change does not necessarily mean changes will be put into effect. To coin a phrase “the proof of the pudding is in the eating”.

To draw a parallel, ESG investors face a similar scenario. On the one hand more than half the money that flowed into European funds last year went into sustainable products and we are seeing more and more funds obtaining a certain level of ESG status. However, sometimes there is a very fine line between “greenwashing” and meeting true ESG standards. In many cases investors are left to fend for themselves in determining the level of ESG within a fund. Looking at the main holdings of a fund may sometimes not be enough. Some ESG funds surprisingly even invest in oil & gas companies.

As professional ethical investment advisors, Monnet Capital we can help you wade through the details of each ESG fund and give you a clear insight in to the measures being taken towards true sustainable investing. If you would like to know more about ethical investments, socially responsible investing and "green" investment funds, please take a moment and complete the contact form provided at the end of this page.

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