For several years, the financial industry has been multiplying initiatives to measure companies' climate performance and engagement. Scarcely a day goes by without a new fund or index being launched on the basis of this climate data, with the primary declared objective of the investments' positive impact on the transition towards a low-carbon economy.
However, a study conducted as part of the EDHEC-Scientific Beta 'Advanced ESG and Climate Investing' research chair shows that the reality of traditional climate investing strategies does not live up to the promises and the communication from their promoters. Speaking of climate investment when the companies' climate performance only accounts on average for 12% of the weight of their stocks in the portfolios is at best a misnomer and at worst misinformation with regard to responsible investors who are engaged for the climate.
This greenwashing also has negative consequences on the potential impact of investment strategies for combatting climate change.
To shed light on this question, itemise the greenwashing risks of traditional climate investing strategies and promote new practices, EDHEC has organised a virtual presentation of the portfolio greenwashing study on September 21, 2021.