The spectre of greenwashing in financial services: A better framework for green bonds and impact investing

Environmental, social and corporate governance (ESG) has been a key part of corporate thinking for a number of years and an integral part of the modern investment strategy. Last year, $263 billon in green bonds were issued, an increase of 40 per cent on the previous year. ¹ This year, it is expected that $350 billion in green bonds will be issued. ESG goals now form a part of most firm’s annual reports and corporate social responsibility reporting. However, there are key issues that need to be addressed relating to regulation, the quality of reporting metrics and the implications for compliance professionals. In particular, there are concerns around how the practice of greenwashing may inhibit further growth and development of investing in this asset class.