Ankit LangeyAs the sustainable finance sector continues to grow, so do concerns about greenwashing. Recent regulations like the EU Taxonomy and SFDR aim to address these issues, but can they truly solve the problem? Letโs delve into this complex question.
๐๐ก๐ ๐๐ก๐๐ฅ๐ฅ๐๐ง๐ ๐ ๐จ๐ ๐๐๐๐ข๐ง๐ข๐ง๐ ๐๐ฎ๐ฌ๐ญ๐๐ข๐ง๐๐๐ข๐ฅ๐ข๐ญ๐ฒ
Our founder, Christoph Mรผller, aptly points out that sustainability is a broad concept lacking a universally accepted definition applicable to financial markets. This ambiguity has led regulators to focus on process-level requirements and controls.
While regulations like the EU Taxonomy and SFDR are steps in the right direction, defining the processes Financial Market Participants (FMPs) must follow to label investments as โsustainable,โ itโs debatable whether this approach is sufficient to prevent greenwashing.
๐๐ก๐ ๐๐ข๐ฆ๐ข๐ญ๐๐ญ๐ข๐จ๐ง๐ฌ ๐จ๐ ๐๐ซ๐จ๐๐๐ฌ๐ฌ ๐๐จ๐ฆ๐ฉ๐ฅ๐ข๐๐ง๐๐
Process compliance alone may not meet customer and general market expectations. As Mueller notes, โThe final decision about greenwashing is made by the market and therefore by the customers.โ This insight highlights the gap between regulatory compliance and market perception.
๐๐๐๐ ๐๐จ๐ซ๐:https://inrate.com/blogs/can-new-regulations-solve-greenwashing-concerns-in-sustainable-finance/
