New Rules Needed to Fight Greenwashing in Finance Sector

Prevailing regulatory frameworks will fail to eradicate greenwashing because they are not designed to assess or regulate claims of environmental impact, according to a new report by European think tank 2° Investing Initiative (2DII). The report recommends that the European Commission provide specific rules at EU level to regulate environmental claims in the finance sector, with a particular focus on impact claims. It also calls for further efforts to integrate concepts of environmental impact in the finance sector by the creation of a separate category for impact-oriented financial products and the development of methodologies and tools to evaluate the impact potential. “Current sustainable finance rules do not accommodate the concept of investor impact and consequently are not aligned with the theories of attribution differentiating investee company impact and investor impact,” said 2DII.

 

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