Deadline Looming on Greenwashing Call for Evidence

    Stockholm (NordSIP) – In what was music to the Laundromat’s ears, three European Supervisory Authorities (ESAs) made a Call for Evidence (CfE) in November 2022 on the subject of greenwashing.  The original deadline has now been extended to 16 January 2023.  This means that remaining respondents should move swiftly to provide their input via this link.

    The CfE is being organised by the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).  Contributions are being invited not only from those financial institutions under the remit of the three ESAs but also market associations, academia, retail investors and other relevant stakeholders.  The CfE was originally instigated at the request of the European Commission.  It aims to gain a better understanding of greenwashing in all its forms with the aim of ensuring that the regulatory response is adequate.

    All types of washing under scrutiny

    It is worth noting that despite the use of the term “greenwashing” and the expectation that most of the information will relate to climate-related claims, the CfE is intended to cover all aspects of sustainability including social and governance themes.  The ESAs wish to collect a broad range of views on drivers and manifestation of greenwashing, along with examples from both the financial markets and the underlying sectors and industries.  They are also seeking to collect data that indicates the scale of the problem and the highest areas of risk.

    Interestingly, there is an effort to understand not just the output of greenwashing perpetrators but also the mechanisms that help disseminate the false information intentionally or otherwise.  These could be ESG ratings providers, investment managers, credit rating agencies or other market participants and intermediaries.  Laundromat has covered many instances of greenwashing being carried out by organisations that are seemingly well rated in ESG terms or included in sustainable indices, so this level of granular analysis is welcome.

    Net closing in on greenwashers

    Greenwashing is both a sign of a thriving sustainability movement, as people scramble to jump on the bandwagon, and a serious threat to it by fuelling scepticism and anti-ESG arguments.  The UN-sponsored High-Level Expert Group (HLEG) on the Net-Zero Emissions Commitments of Non-State Entities already signalled a crackdown on greenwashing at COP27.  The Laundromat will keep a keen eye on developments emanating from this comprehensive CfE, and hopes to be effectively redundant once the net has finally closed in on the last remaining greenwashers.

    The full CfE questionnaire can be downloaded from the ESMA via this link



    Image courtesy of Jarrett Tilford from Pixabay
    Richard Tyszkiewicz
    Richard Tyszkiewicz
    Richard has over 30 years’ experience in the international investment industry. He has worked closely with major Nordic investors on consultancy projects, focusing on the evaluation of external asset managers. While doing so, Richard built up a strong practical understanding of the challenges faced by institutional investors seeking to integrate ESG into their portfolios. Richard has an MA degree in Management and Spanish from St Andrews University, and sustainability qualifications from Cambridge University, PRI and the CFA Institute.

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