With pressure mounting on the financial industry to deliver on their promises of more 'ethical' practices and investments, how will they overcome greenwashing?
Impaakt CEO and Co-founder Bertrand Gacon spoke to the team at The Fintech Times and provided his insight as part of their ethical banking series that explores all manner of topics on the minds of most investors.
How can they ensure the act and invest ethically? This article tackles concerns such as data and transparency, regulations, reporting standards and more.
We think you'll find Bertrand's insight interesting, you'll also hear from many other industry experts who had views on ways that investors can avoid the problem of greenwashing.
How to avoid greenwashing - with the Fintech Times
Faye Turner
7 min Read Time | August 2nd 2022
Impaakt - Insight on how to avoid greenwashing
"Bertrand Gacon, CEO and co-founder of Swiss fintech Impaakt, has been at the heart of the discourse surrounding ESG standards for many years; specifically how the financial industry plays a central role in advancing sustainable development goals (SDGs).
He warns that because sustainable and ethical finance are such broad concepts, it makes them highly susceptible to greenwashing.
“The array of terminology and lack of precise definitions is also unhelpful,” he says. “For example, what does it mean if an investment fund has ‘responsible’ in its name? Will it exclude fossil fuel companies, or invest in ‘responsible’ ones? Is it focusing on companies that are responsible towards their shareholders or responsible towards the planet?”
So what can be done?
Gacon suggests that while regulators are attempting to address these difficulties, in the near term, investors should focus on the integrity of the data being utilised.
“ESG asks the wrong questions, it asks what risks the environment, social and governance factors pose to the company. At the core of if, that question needs to be reversed and we need to focus primarily on the net impact of a company on the world.
“Focusing on impact means that promises and practices are cast aside. One method to avoid greenwashing is to run your portfolio through the portfolio diagnostic tool on the Impaakt platform, this will give your portfolio an impact score, one that considers the net impact of the companies in the portfolio.”
Read the article in full, originally produced on the Fintech Times website here.
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