Member of the European Parliament Henrike Hahn (The Greens/EFA), deputy speaker of the German delegation of the Greens and deputy member of the ECON Committee comments on the study published today by the international media project "Great Green Investment Investigation" on greenwashing on the capital markets:

"The result of the international media project "Great Green Investment Investigation" is not surprising.

Unfortunately, greenwashing on the financial markets is still common practice.

The new guidelines from the European Securities and Markets Authority (ESMA) are a step in the right direction - even if ESMA's plans continue to allow too many fossil investments for sustainable funds. For example, funds can continue to invest in companies as long as they do not generate more than 50% of their revenue from fossil gas.

It is absolutely important that also EU legislators put a stop to greenwashing in order to direct money flows in truly sustainable investments. At the beginning of this year, the Commission, Council and Parliament agreed on a regulation for ESG rating agencies. This new regulation rightly requires ESG rating providers to be more transparent, addresses conflicts of interest in the ESG market and places rating agencies under the supervision of ESMA. This protects consumers from misleading financial products and channels capital flows into truly sustainable investments.

But the new regulation also has its loopholes. The Commission, the Member States and conservative and far-right parties in the European Parliament vehemently opposed setting clear minimum standards for ESG investments already in the regulation itself. Sustainable investments must be made in accordance with the Paris Climate Agreement - this requirement has still not been accepted by some. Despite improved transparency and supervision, there is still too much room for greenwashing."

 

I am happy to answer any further questions.