However, with the vast growth in ESG investment practices, there has been an increasing concern amongst the industry that this trend could bring about substantial challenges, most notably that of greenwashing. Some in the industry believe that many funds are not as sustainable as they claim to be, whilst it has also been noted that the management of these strategies, specifically the application of ESG credentials, can also be difficult. A notable example of this is labelling of government bonds, which remains a challenge with no industry standard in place.
At JPES Partners, we always seek to be at the forefront of understanding the investment media’s sentiments towards key industry trends. To this end, we will be releasing our 2021 ESG Media Audit in the coming weeks, which outlines leading financial journalists’ views towards the quality, quantity, and usefulness of ESG content they receive from investment firms, along with who they believe are the current leaders in the ESG field.
As part of this, we asked journalists to rank their views on how concerned they currently are by the issue of greenwashing, ranging from ‘very concerned’ to ‘It isn’t an issue at all’. The results are outlined in the graphic below, and it is clear to see that on the whole, the media’s sentiment remains that of concern.
Indeed, over 72% of respondents in our audit stated that they are either ‘slightly’ or ‘very concerned’ about the issue of greenwashing in the investment sector, while none of the participants we spoke to claimed to be ‘unconcerned’ or that they ‘don’t see the topic as an issue’ at this time.
In particular, one contributor noted that for the most part, “the proliferation of content on the subject has not helped matters”, while also adding that the sheer volume of content received now makes it even more difficult to decipher whether a manager / fund is delivering on its ESG objectives.
More worryingly, this seems to be an issue for the media that will not be going away. Investor appetite appears undampened, and while it is certainty positive that investors are becoming more concerned with environmental, social, and governance issues, the increase in the volume of ESG products and content could continue to increase the media’s already existing concerns.
This is a trend that all investment firms must be aware of when communicating with the media around the topic of ESG, presently and moving forwards. More than ever, there is a need for clarity around managers’ investment philosophy, practices, and commitments when communicating externally. Failure to do so runs the risk of adding to uncertainty that already exists in the space.
Journalists want to hear what managers are doing right now, not what they potentially plan to do in the future, and when they speak on this, they must provide clear evidence and data to back this up.
“The debate has moved on, now is the time for action”, one journalist outlined as part of the audit. This certainty appears true, and managers that do not adhere to this as part of their ESG communications run the risk of being alienated and left behind.
For more information or to discuss the findings of JPES’ ESG Media Audit 2021, please contact firstname.lastname@example.org