Eco Voice Q & A: Pablo Berrutti, Senior Investment Specialist, Stewart Investors
To provide insights into greenwashing, and how investors can spot it, how they can test company claims, and whether ESG ratings are a useful tool for investors in assessing this, Tim Langdon, publisher of Eco Voice, had the pleasure of facilitating a Q & A with Pablo Berrutti, Senior Investment Specialist, Stewart Investors.
Q1. What is greenwashing?
Greenwashing is the act of making sustainability related claims that are overstated, untrue or distract from more important sustainability concerns. Other relevant terms include ‘greenwishing’ and ‘greenhushing’.
Greenwishing is lessor known but arguably more pernicious. It is where companies or individuals engage in sustainability efforts for the right reasons, but it is wholly inadequate to address the scale and urgency of the problems. It is a form of magical or wishful thinking.
Greenhushing has risen to prominence recently following the “ESG backlash” and regulatory focus on greenwashing. It is where organisations downplay or hide their sustainability efforts to avoid criticism.
Q2. Why is it important to avoid greenwashing when investing?
It’s both illegal (misleading and deceptive conduct) and unethical, but there is a spectrum. For as long as there has been marketing, companies have tried to build brands around an often-intangible ethos, even where the realities may conflict. Such examples include advertisements with young healthy people drinking soft drinks even though sugar causes diabetes or adventurous country drivers of SUVs, even though they are mostly used in cities.
Sustainability efforts are necessarily aspirational, recognising the need for change and the desire to improve and innovate. These more qualitative motivations have clashed with the demand to evidence outcomes because the sustainability of a product or service has become its own selling point. This growing reality lifts the bar on what information companies need to provide to support their claims and it is important that companies stay ahead of that.
READ MORE:
https://www.ecovoice.com.au/eco-voice-q-a-pablo-berrutti-senior-investment-specialist-stewart-investors/
