Par Jean-François Pons, avec l’aimable autorisation d’Eurofi
INTRODUCTION
The volume of sustainable or ESG (Environment, Social, Governance) finance is continuously increasing. Last year for instance, the issuance of sustainable bonds (Green bonds + Social bonds + Sustainable-linked bonds) exceeded
$ 1.000 Bn, up 75% from 2020. The EU-domiciled ESG funds have also very much increased to € 1.600 Bn at the end of 2021, up 60% from the end of 2019.
But there is also a growing suspicion of “greenwashing” and a couple of financial actors are under investigation for
this reason or have even been penalized in Europe and the United States.
Moreover, it is often not clear for investors why a financial product is said to be sustainable. Sustainable (or ESG) labels and sustainable rating providers have the goal to help the investor who wants to assess the sustainability performance of corporates or of financial funds.
Due to the rapidly increasing interest for sustainable investments, there is a real dynamism in sustainable labels and sustainable ratings. But there is also a big diversity and a great complexity for investors when they see the difference of sustainability assessment for the same corporate by different labels or sustainable rating providers.
The sector has also been impacted by greenwashing suspicion. For instance, Bloomberg at the end of 2021 has questioned the adequacy of ESG marks given by the giant sustainability ESG rating agency MSCI.
Two recent documents clarified the situation and the trends of sustainable labels and sustainable rating providers in the European Union: A study by Novethic on the most used EU ESG labels.
A report from the European Securities and Markets Authority (ESMA) on sustainable rating agencies in the EU, which followed a wide consultation.
