Ethical Investing - What is 'Greenwashing'?

29.06.2020
Sarah Edmunds
Financial Planning

You may have already seen in the financial press, news of the recent rise of ESG (Environmental, Social and Governance) and Ethical Investing.

You may have already seen in the financial press, news of the recent rise of ESG (Environmental, Social and Governance) and Ethical Investing.  Whilst this, and the introduction of new fund options in the sector is commendable, it raises the risk of ‘greenwashing’. 

‘Greenwashing’ is where products, or in this case funds, are marketed as being more ‘green’ in order to be seen in a more positive light by the consumer.

Adviser firms and individual investors alike should beware of funds that simply call themselves ‘ESG’.  It is therefore appropriate to look underneath the headline fund name and consider what the fund is actually investing in.  Truly Ethical funds will often publish a list of criteria which all holdings must meet before being included in the portfolio.  Each fund will have slightly different criteria and there is no ‘one size fits all’ solution. 

Advice from one of our specialist advisers can help build a portfolio that is as individual as you are, whilst avoiding an increasingly ‘greenwashed’ marketplace.  

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