Why ESG can be misleading and what can be done to protect ethical investment

29.09.2020
Press
1 min read time

With becoming an increasingly significant consideration for discerning investors, being able to differentiate between true and merely a green veneer – or, ‘greenwashing’ – will become increasingly important as time goes on. That is why Tribe Impact Capital wants investors to know the risks of relying on (Environmental, Social and Governance), and how a promising acronym might just be another way of pulling wool over consumers’ eyes.

According to the Tribe analysis, ESG has become a ‘powerful framework’ for businesses to consider their operational risks by using a shared language, and to provide shareholders and lenders with a gauge of the extent to which companies identify and mitigate against these risks.

However, despite encouraging steps in the right direction, and introducing vocabulary into corporate discourse, a major problem with ESG data sources is that the consumers are led to believe assertions of ‘sustainability’, ‘responsibility’ and ‘impact’ often provided by a singular piece of publicly available information.

Full article.

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Important Information: Tribe Impact Capital LLP is authorised and regulated by the Financial Conduct Authority (“FCA”). Our FCA registration details are set out in the FCA Register under Firm Reference number 756411 (www.fca.org.uk). Tribe Impact Capital LLP is registered in England and Wales (registered number OC411984) and our registered office is 52 Jermyn Street, London SW1Y 6LX. This document does not provide you with enough information to make an informed investment decision. Neither does it constitute advice or a personal recommendation or take into account the particular investment objectives, financial situations or needs of individual clients. If you are not an existing client of Tribe Impact Capital LLP, this document is considered to be marketing material. Whilst this document may contain information about specific companies it is not an investment research report as defined by the FCA. This document is not intended and should not be construed as an offer, solicitation or recommendation to buy or sell any investments. You are recommended to seek advice concerning suitability of any intended investment decision from your investment adviser. Past performance is not a reliable indicator of future performance; and the value of investments, as well as the income from them can go down as well as up. Investors may get back less than the original amount invested. Any type of impact investment will involve risk to investors capital and the expected environmental or social return may not be achieved. The information and opinions expressed herein are based on current public information we believe to be reliable; but we do not represent that they are accurate or complete, and they should not be relied upon as such. Any information herein is given in good faith but is subject to change without notice. No liability is accepted whatsoever by Tribe Impact Capital LLP or its employees and associated companies for any direct or consequential loss arising from this document. This document is not for distribution outside the European Economic Area.

The value of any investments and the income from them can go up or down so you may get back less than your initial investment.