Europe’s flagship green investing framework has failed to increase investment in “sustainable” funds or encourage fund managers to construct more environmentally friendly portfolios, new research has found.
Academics from Stanford, Harvard and Amsterdam universities and London Business School found the EU legislation, introduced in 2021 to encourage sustainable investment, had not meaningfully improved funds’ green credentials in terms of carbon emissions or on other measures, nor had it boosted fund flows to green funds.
The findings are likely to strengthen the view of some critics that the investment industry is unable to significantly help combat climate change and is instead engaging in so-called greenwashing to present itself as more environmentally friendly than it really is.