Greenwashing is an issue of increasing concern for investors, with false or misleading claims about the environmental benefits of a product or service impeding their ability to accurately understand their own portfolios.

The rapidly growing evidence of greenwashing has potential to affect investor confidence in green or sustainable products, with significant implications for a rapidly growing market. During 2020, environmental, social, and governance-focused (ESG) funds available to European investors saw GBP200 billion net inflows. This was almost double the figure of 2019 despite the ongoing COVID-19 pandemic.

Indeed, many asset managers have realised that in a post-pandemic and climate change-aware world, ESG credentials attract investment. As investors flock toward ESG opportunities, they are likewise realising that not all ESG funds are made equal. So, how can you spot greenwashing in the market, how are new ESG regulations going to affect greenwashing, and what can you do to avoid it all together?