A recent survey conducted by EY highlights a growing concern among investors about greenwashing and the reliability of ESG data. The EY 2024 Institutional Investor Survey, which included responses from 350 investment decision-makers globally, reveals that while 88% of investors have increased their use of ESG data over the past year, trust in this data is notably lacking. Approximately 85% of respondents believe that greenwashing and misleading statements regarding company sustainability performance have worsened over the past five years.
Despite the increasing reliance on ESG information, nearly two-thirds of investors foresee a decline in the integration of these factors into their decision-making processes, shifting towards more immediate concerns. This change is surprising, given the rise in demand for sustainable investments, with 74% of asset managers reporting increased client interest in ESG products.
The survey also indicates that climate change remains a top priority for many investors, with 55% citing it as a major influence on investment strategies. However, issues of trust in sustainability reporting persist, with 80% of investors calling for improvements in the materiality and comparability of such reports. In light of upcoming regulatory frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) and the IFRS Foundation’s ISSB standards, investors are actively seeking to enhance their expertise in these new requirements.
Dr. Matthew Bell and Velislava Ivanova from EY emphasize the importance of closing the emerging “say-do” gap, which highlights the disconnect between investors’ stated commitment to sustainability and their practical actions. They argue that addressing this gap is crucial for ensuring that more capital is directed towards long-term sustainable initiatives, thereby recognizing sustainability as a significant value driver rather than merely a risk factor.
As the landscape of corporate sustainability evolves, the need for accurate, trustworthy, and comparable ESG data has never been more pressing.
Source: https://www.esgtoday.com/85-of-investors-say-greenwashing-is-a-growing-problem-ey-survey/