Under European Union rules, asset managers will need to provide clarity on the sustainability of their investment portfolios. This reporting is to be in place by March 2021. But of course now that date is coming closer, there is a push to delay it. An excellent article in the Financial Times provides more insight into this issue including a clear discussion of the challenges facing asset managers. However, given the fact that this request has long been known and that there is considerable evidence that attention to ESG factors leads to better financial returns (see the work of George Serafeim for example).
As noted in the article there is a lot of work to be done and not all companies will have the data available. But with any change, starting is the best way to get to the desired end state. And the need to address “greenwashing” is critical if companies and investors are going to move forward to address the challenges of climate change and social and economic inequality. If not today, then when?
