But there are also clearly identified cases of greenwashing, right?
Fabio: Yes, that's correct. There are some bad apples in an overall credible industry. It is therefore important to keep some points in mind that can be helpful in identifying greenwashing:
- The positioning of the fund contradicts market practices, e.g. in the handling of controversies or the use of customary exclusion lists
- Misleading or deceptive information is provided about a product
- Greenwashing can also occur with investment advice. This is the case if the advised or sold "green" product does not match the declared customer preferences or risk profile.
As Head of ESG Strategy & Development, what are you doing to combat greenwashing?
Fabio Pellizzari: It is in the bank's best interest to avoid greenwashing. Greenwashing can become a compliance and reputational risk for the overall business. At Zürcher Kantonalbank, we counteract this with transparent investment processes and continuous sustainability reporting.
What must the industry do?
Fabio Pellizzari: Standards will help to identify the bad apples. I would be glad if the financial sector could do this by means of self-regulation. In terms of investors, financial education should include the most important sustainable concepts such as exclusion criteria, investment stewardship and the use of ESG criteria. With transparency, standards and education against greenwashing (zkb.ch) l Finally, as with any form of communication, there are transmitters and receivers. Communication is successful when it is possible to avoid misunderstandings on both sides and minimise disturbing background noise. In the case of the latter, I explicitly appeal to the press, which is currently using the term greenwashing in an almost inflationary way.
The issue of sustainable investment is so central because political, social and economic interests should go hand in hand to meet the challenge of climate change. Isn't that why the interest is so great?
Fabio Pellizzari: 11% of the assets of Swiss public funds are currently invested sustainably. It would be interesting to talk about the 89% that are not invested sustainably.