The phenomenon of greenwashing in the current market is more complex and difficult to identify than 36 years ago. Greenwashing can be understood as “declaring green actions to the outside world when do not meet the green standards”, or “exaggerating green actions”
In order to curb ESG greenwashing, more than 80% of investments related to ESG can be named as ESG funds, and more than 50% of minimum ESG investments related to sustainability can be named as sustainable funds
Since United Nations Global Compact put forward the concept of Environmental, Social and Governance, the financial industry has always been an important driver of the development of ESG, and various types of ESG products have emerged in an endless stream. These products serve as a bridge between investors and companies, helping funds to be efficiently allocated to long-term assets.
Common ESG financial products include ESG bonds (such as green bonds, blue bonds, transition bonds, sustainable bonds, sustainable linked bonds), ESG funds and ESG indexes. Although these financial products are still facing problems such as greenwashing, they have indeed contributed to the development. Regulators are also trying to reduce the negative impact of these products.
ESG focuses on the improvement of long-term value, and ESG products are attracting long-term funds. In the current situation, balancing risk and return is an important topic, and ESG products will become an important choice for investors to allocate assets.
