This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Publication

"Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing" by EDHEC Business School

image credit: Credit: EDHEC
Laurent Segalen's picture
CEO Megawatt-X

Laurent is a Franco-British financier, founder of Megawatt-X, the London-based global platform for Renewable Energy Assets. For the past twenty years, Laurent has been trading and managing...

  • Member since 2019
  • 130 items added with 98,946 views
  • Sep 23, 2021 10:18 am GMT
  • 829 views

Access Publication

In this study, EDHEC Business School identifies greenwashing risks in the construction of portfolios that represent popular climate strategies, especially those that correspond to net-zero alignment strategies.


To carry out this analysis, authors define key requirements in order for strategies to be consistent with influencing firms to reduce greenhouse gas emissions. Based on stylised equity strategies constructed using firm-level emissions data, they show that commonly-used ESG portfolio construction mechanisms fail to deliver consistency with impact objectives.

As a result, the vast majority of institutional funds and mandates that claim to have a positive impact on the climate are exposed to large and obvious greenwashing risks, largely because they exhibit attractive climate metrics at portfolio level through implementation of these flawed strategies.

De facto, the investment industry, in spite of its promises, does little to reallocate capital in a direction and in a manner that could incentivise companies to contribute to the climate transition
 

Laurent Segalen's picture
Thank Laurent for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Matt Chester's picture
Matt Chester on Sep 23, 2021

Greenwashing is an ugly practice. I think many will look back on these years and see just how rampant it is-- hopefully the mass population will quickly wisen up and gain enough energy/climate 'literacy' to see through half-hearted declarations and measures

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »