ESG Investors, Be Aware of ‘Greenwashing’

ESG Investing on the Rise:

• “ESG” was used 100% more on S&P 500 corporate earnings calls in the 2nd quarter of 2019 than the 1st quarter
• Globally ESG funds are estimated at $30 trillion
• Bank of America Merrill Lynch predicts up to another $20 trillion to be invested in ESG funds in the next 30 years
• ESG investments reduce volatility in downturns

What is Greenwashing? the practice of making statements or policies that appear more serious about ESGs than they actually are

Why it Matters: $$$. When ESG funds are reported to contain stocks that are not ESG friendly,  (aka greenwashing), stocks are quickly dropped from portfolios resulting in much lower rankings for funds & fund managers. 

What to do: To pick ESG winnersfact-check ESG claims until standardization of terms & transparency are more prevalent 

Market Watch | Opinion: For ESG investors, the newest challenge is separating fact from greenwashing

Barron’s | Why a Recession Could be Good for ESG Investors