Regulatory steps, such as improved disclosure, are essential tools against greenwashing. But the real difference comes when people care about and engage with the disclosures. Caring makes greenwashing both more difficult and less worthwhile.
It is wrong to attack ESG as a smokescreen, distracting from effective policy action. Public policy is the highest priority, but it alone will not be enough. We need investor action too. Don’t write off every investment manager as irredeemably part of the problem.
If an ESG program is to be more than a bolt-on, there has to be a genuine connection to the investment proposition of the firm. An asset management firm must ask itself: how does ESG relate to how we invest?