Financial regulators must work together on an international framework to stamp out potential ‘greenwashing’ as capital inflows increase, affirms the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The call-to-action from deVere Group’s Nigel Green comes on the back of COP26, at which governments and institutional and retail investors pledged more financing for environmental, social and governance (ESG) orientated initiatives.
“COP26 has galvanised the ESG gold rush that has been taking place over the last year, as an increasing number of investors pursue profits with a purpose with sustainable investments,” said Green.
“It’s the hottest investment megatrend and this is set to grow as financial powerhouses are helping to unlock and mobilise the trillions of dollars of private finance that is urgently required to halt the worst effects of human-created global warming.”
Green added that to ensure that this flood of private money continues and is put to work in the right way, “we now need global regulators to work together on an international framework of standards.
“This will help prevent greenwashing – misleading environmental claims – which could damage the essential credibility to guarantee the inflows are maintained.”
More needs to be done
Although regulators have recently been ramping up scrutiny in regard to greenwashing, more still needs to be done, the deVere CEO said.
“We need joined-up thinking on a global level to tackle a global issue. Failure to do so will severely compromise the mission.”
Recently, the deVere Group pledged to position $2 bln of assets under advisement into ESG investments within five years.
The Group is also one of 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of global finance companies that will help accelerate the transition to a net zero financial system. Membership means it is committed to “aligning all relevant products and services to achieve net zero greenhouse gases by 2050 and to set meaningful interim targets for 2025.”
The organisation has also confirmed that it “aims to significantly speed-up its own meeting of these Science Based Targets to reduce operational emissions in line with limiting global temperature rises to 1.5 degrees centigrade.”
“COP26 has put environmental concerns front and centre, now we need regulators to help shore-up the industry to ensure the avalanche of private money is not cut off at this critical time,” Green concluded.
“This means internationally-approved, enforceable anti-greenwashing rules.”