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ESG greenwashing exposed: The myth of sustainable eco-funds
"Are ESG funds really sustainable and profitable? Find out why the promise of eco-funds is often not kept. A critical analysis shows the truth behind the advertising. #ESG #Sustainability #Fonds"
ESG greenwashing exposed: The myth of sustainable eco-funds
Investing in ESG funds that are based on environmental, social and governance criteria has long been promoted and supported by the EU. But despite efforts to promote sustainable investing, graphs show that ESG funds fail to deliver on the promise of profitability. ESG stands for Environment, Social and Governance and refers to excluding companies that do not meet minimum standards in environmental protection, working conditions and corporate governance.
The European Union uses the Taxonomy Regulation to classify funds according to their ESG criteria, with strict requirements applying. Still, funds that follow the strictest criteria have seen outflows. A survey shows that only a small percentage of German savers consider ESG criteria to be crucial to their investment decisions, as other factors such as returns and costs are more important to them.
ESG ratings are intended to help funds select sustainable companies. However, research has shown that the results of these ratings vary widely and there is little consistency between different agencies. There are also doubts as to whether sustainable investments actually influence company behavior. Nevertheless, analysis by economists shows that the impact of such investments on company behavior is questionable.