Is sustainable finance just greenwash?
Business Daily
BBC
4.4 • 796 Ratings
🗓️ 23 March 2022
⏱️ 17 minutes
🧾️ Download transcript
Summary
ESG funds - which claim to promote environmental, social and corporate governance best practice - are all the rage. But are investors being taken for an expensive ride?
Ed Butler speaks to one man with his doubts - Tariq Fancy, who used to be in charge of sustainability investing at BlackRock, the gigantic fund management firm, whose boss Larry Fink is an advocate for the role that big finance can play in accelerating the transition away from fossil fuels.
Today investors are faced with a confusing menagerie of products that purport to be climate-friendly, as described by Dylan Tanner of the lobbying research firm InfluenceMap. In reality, many of them charge high fees for some pretty questionable environmental benefits. But if investors feel misled, could they find legal recourse in the form of a class action lawsuit? Ed asks Fiona Huntriss of the UK law firm Pallas Partners.
Producer: Victoria Broadbent
(Photo: $100 bill covered in green paint; Credit: Getty Images)
Transcript
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| 0:00.0 | Hi there, my name's Ed Butler. Welcome to Business Daily from the BBC. Today, sustainable investing, the multi-trillion dollar industry that critics say is just greenwash, meaningless hype that does little or nothing to save the planet. |
| 0:16.0 | You know, we could call it greenwashing, you can call green wishing, you know, whatever it is, is a strong impetus for those |
| 0:21.9 | products in particular to find a way to paint themselves green. Now legal experts say that dodgy |
| 0:27.5 | labelling on investment products could provide grounds for a massive class action lawsuit. My |
| 0:34.0 | suspicion is that you're going to start seeing some claims, even if they're speculative. |
| 0:39.4 | It will only take one successful claim before other claims are necessarily being talked about in the market. |
| 0:45.0 | Dishing the Dirt on Greenwash, Business Daily from the BBC. |
| 0:51.2 | It is a multi-trillion dollar industry, and it's growing all the time. |
| 0:57.1 | Wall Street Titans talking big about saving the planet. |
| 1:01.7 | Our clients are looking to invest in more renewable, sustainable products. |
| 1:06.5 | So what we're witnessing worldwide is a surge of interest in clients looking to put money in more renewable components of energy. |
| 1:18.3 | And that surge is going to continue. |
| 1:21.4 | That's Larry Fink, the founder and CEO of BlackRock, the fund manager, which more than any other, has put sustainable investing |
| 1:28.3 | on the map, ESG investing, as it's known, targeting environmental, social and corporate governance |
| 1:35.2 | causes. It could be worth close to $40 trillion these days, by some estimates. That's getting |
| 1:41.5 | close to a third of the total amount of money invested by all |
| 1:45.8 | funds around the world. But what does the ESG label really mean? Is it really worth the paper it's |
| 1:51.5 | written on? Even former investment black rock managers like Tarek Fancy say they have their doubts. |
| 1:58.5 | There has been very little regulation around what is a green or sustainable |
| 2:02.0 | fund, right? And so if you realize that you can call a fund green, and all you need to do is, |
| 2:09.5 | you know, slightly tilt your allocation so you own a little bit more of tech companies and a little bit |
| 2:14.1 | less of the fossil fuel majors, right, a little bit less of Exxon, a little more |
... |
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