Greenwashing Recedes as Common ESG Language Emerges
Video
December 2, 2021
Inflows to ESG funds in 2021 have been heady, but as ESG's star has risen, so too have questions about its credibility. Skeptics and idealists alike tout examples of greenwashing or social-responsibility spin. The good news is that we see an emerging common vocabulary that should aid transparency and, more importantly, clarify choice. We've shown one way to use these fund labels below. With our Implied Temperature Rise metric¹, we found that "Climate" equity funds categorized under SFDR articles 8 and 9 were more aligned with a 1.5o C to 2o C trajectory versus uncategorized funds (chart below to the left). These funds were also more distributed toward the lower end of the carbon-intensity spectrum ("very low" and "low") and less towards the higher end relative to the entire fund universe (chart below to the right).
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