New Guide Published to Help Asia's Finance Industry Combat Greenwashing

ClientEarth and the Asia Investor Group on Climate Change (AIGCC) have published a new guide, “Greenwashing and how to avoid it: An introductory guide for Asia’s finance industry”, to help players in the Asian finance sector understand greenwashing issues in the industry.

Greenwashing has the potential to significantly impede the green transition, risking distorting the financial markets and undermining the effective allocation of capital.

Designed with asset managers, banks, and institutional investors in mind, the publication offers practical information to combat greenwashing and can be downloaded here.

The guide features an overview of emerging forms of greenwashing and the different regulations, guidelines and legal action on greenwashing across Asia and elsewhere and is supplemented with selected case studies from leading financial institutions in Asia together with recommendations for financial institutions to guard against greenwashing risks.

Speaking at the online launch, Herry Cho, Managing Director, Head of Sustainability and Sustainable Finance of SGX Group said: “The lack of global consensus and market clarity on claims that are ‘green’ has led to an increase in greenwashing accusations. If left unchecked, it presents long-term risks, and can impede the progress in our urgent fight against climate change.

“Institutions need to reflect on and evaluate their climate governance and communication strategies to ensure transparency of their intentions on climate action – the forward-looking approach of the report is particularly helpful to achieve that.”

Some of Asia’s leading asset owners and asset managers gave their insights at a panel discussion during the event launch. They touched on the central role of green finance in the net zero transition, the challenge and potential liability of greenwashing.

The panellists suggested actions for regulators and the finance sector to combat greenwashing, through enforcing existing laws and developing new regulations.

One of the panellists, Sophia Cheng, Chief Investment Officer at Cathay Financial Holdings, said, “Greenwashing creates inaccurate pricing, an uneven playing field, reduces investor confidence and may lead to misallocation of capital. This guide is a useful starting point for financial actors to apply and take concrete actions to guard against unnecessary exposure to greenwashing risk.”

#greenwashing #greenfinance