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Greenpeace slams ‘sham’ sustainable investment funds

People ride bicycles on a dike at Norderney island, Germany, in front of wind turbines, June 1, 2021.
People ride bicycles on a dike at Norderney island, Germany, in front of wind turbines, June 1, 2021. Copyright 2021 The Associated Press. All Rights Reserved.

Greenpeace Switzerland has called for better policing of the sustainable investment sector after finding that many funds in this category are failing to deliver on their promises.

A study of 51 “sustainable” funds marketed in Luxembourg and Switzerland left “much to be desired”, said a report issued by the NGOExternal link on Monday.

The examination found that most funds lacked any real “Environmental, Social and Corporate Governance” (ESG) impact. The few positive cases brought improvements to major environmental controversies or the cement and defence industries.

“Most of the so-called sustainable investments that are currently being offered are actually damaging the climate,” complains Greenpeace.

“Without clear guidelines on what constitutes sustainable investments, there is a great danger of greenwashing, misleading customers into thinking they are making sustainable investments when in fact their money does not end up having a positive impact on the environment and society.”

The sustainable finance industry is booming worldwide following the Paris climate agreement and the introduction of UN sustainable development goals.

The Swiss government and financial sector has voiced ambitions for Switzerland to become a leading sustainable finance centre in future.

In a report released last weekExternal link, the association Swiss Sustainable Finance stated that sustainable investments in Switzerland increased by nearly a third last year to reach CHF1.5 trillion ($1.6 trillion).

But Greenpeace fears that many are failing to follow goals set out by the United Nations or the Paris climate agreement and that financial institutions are simply allowed to make up their criteria as they go along.

The NGO is calling for lawmakers and regulators to step in to force transparency, impose minimum standards and to stop financial players from cheating investors.

“In Switzerland no measures have yet been defined to regulate sustainable investment funds or to prevent greenwashing,” the report states.

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