Greenwashing a problem for fund management industry, study finds

clock • 1 min read
Greenwashing a problem for fund management industry, study finds

More than 85% of investors have said the fund management industry has a problem with greenwashing, while 81% want to see more standardisation of ESG reporting, globally. 

The boutique asset management think tank, IIMI, carried out the study to gather views on the recent steps taken by the FCA around ESG. 

It also found 69% of its membership have welcomed the FCA's proposals on TCFD reporting, although just 41% agreed that TCFD was the best ESG reporting template available. 

Just over half of those surveyed said the FCA's guiding principles would help to combat greenwashing, with a further 22% arguing they will be beneficial to fund competition and ESG benchmarking. 

Greenwashing tops investors' concerns around ESG

The biggest challenge highlighted by the members in relation to the FCA's proposals on climate-related disclosures was the risk of creating further complexity, cited by 46% of IIMI members, with an addition 31% citing costs as a concern. 

Nick Mottram, chairman of the IIMI, said: "IIMI fully supports the FCA's guiding principles and proposals to make TCFD reporting mandatory as it believes this will root out greenwashing, which we and the vast majority of our members believe to be a problem in the industry - and one that we are looking to counter. 

"However, the UK must carefully consider the unintended consequences of potential overlap and divergence with other ESG regimes. With more markets increasingly adopting ESG legislation, an element of standardisation is required, or it could create further confusion, which is clearly a concern among our members. This is something that IIMI is willing to engage with regulators about."

IIMI is comprised of 43 independent asset management firms from the UK and Europe, managing approximately £500bn and employing several thousand people. IIMI Singapore was launched in 2019.