How ESG Is Shaping The Funds Industry

Why is ESG data important?

When looking at an investment decision, looking at a firm as a whole is key to looking at their board (in terms of diversity), their product and the overall structure of the organisation to see how it measures up to ESG scrutiny. But data became an integral part of the conversation and most notably the challenge of getting access to ESG related data. A snap live poll on the day of people in attendance stated that around 96% said that one of the biggest challenges of ESG is getting access to data. One of the panelists interestingly stated that “you can’t manage what you can’t measure”.

What is the difference between Article 8 and Article 9 funds?

The conversation flowed into the difference between Article 8 and Article 9 funds and the perception of which one is better. The conversation between the panelists was alluding to a perception that Article 9 funds are better as they are fully focused on sustainability but the jury is still out as Article 8 funds focus on environmental and social investments but it’s not the main objective of the article.

ESG and Greenwashing

Greenwashing is the process where an organisation promotes itself or its product offering as an environmental/sustainable solution but in reality it is not. The issue of greenwashing became an interesting topic and in particular how ESMA have a top priority to scrutinise organisations who might be inclined to participate in such practices. This is quite timely with the recent news of Deutche Bank’s DWS unit being raided by authorities for alleged greenwashing claims.