(Bloomberg) The current maelstrom should be seen as “manna from heaven,’’ said Kiernan, co-founder of Invest Green, a Toronto-based firm that educates investors on sustainable investing. “It should ideally catalyze a big shakeout, an incursion on greenwashing and result in a smaller, leaner industry with much better clarity and quality.”
The list of insiders discomfited by the growth of the industry — valued at about $40 trillion by analysts at Bloomberg Intelligence — has jumped exponentially in the past year. They bemoan newer entrants that have jumped on the bandwagon to market investments that have little real-world impacts. They say widely used ESG ratings are riddled with errors and need to be standardized, and they want asset-management firms to to face tougher scrutiny.
After doing little during the early years of the ESG bonanza, regulators are trying to catch up. Just last month, the US Securities and Exchange Commission proposed a slate of new restrictions aimed at ensuring ESG funds accurately describe their investments. Some also would need to disclose the aggregated greenhouse gas emissions of companies they’re invested in, according to the SEC.
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