ESG governance washing

ESG governance washing

Governance-washing is likely to be added to ESG’s lexicon, alongside green-washing and social-washing. Fund managers who practice governance-washing are those that want the world at large, and their investors in particular, to think that they are more diverse, modern and ESG-orientated than they actually are.

There may be a link between fund managers who have re-categorised some of their old funds, as many have done, as sustainable and those who also practice governance-washing. There have been many articles recently about funds that have been re-branded as ESG, that might have one or two investments in companies that have some connection with sustainability. However, the rest of the fund’s portfolio is allocated to an array of companies that have nothing whatsoever to do ESG investing.

To read more on this story see the May issue of The NED.

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