The Swiss branch of the environmental organization Greenpeace demands stricter criteria for sustainable funds, questioning their environmental impact in a study published on Monday that scrutinized 51 Swiss and Luxembourg funds.
The environmental organization asked the Swiss rating agency InRate, specializing in the assessment of environmental, social and corporate governance (ESG) issues, to examine around fifty funds to check whether they “have well a beneficial impact, “she said in a statement, while green finance is booming.
The work focused on Switzerland as it is one of the largest financial centers in the world for wealth management and Luxembourg, where many investment funds in Europe are domiciled.
“We offer clients investment products whose name and description suggest a positive influence on the environment and society, but which rarely do so,” says Larissa Marti, specialist in finance and society. climate for Greenpeace Switzerland, quoted in the press release, warning against “Greenwashing”.
The study examined these 51 sustainable funds by comparing them to conventional funds based on data from October 2020.
They were assessed in particular on the basis of an average score of their ESG impact, a measure of their carbon intensity as well as a percentage measure of income in their portfolio from activities harmful to the environment, such as agriculture. with fertilizers and pesticides, fossil fuels, nuclear energy or even the most polluting mines and metals and transport.
Although their ESG score is generally better, the difference is not significant according to this study, the difference with traditional funds being limited to 13%.
These sustainable funds are also less involved in activities for which the risks to the environment are easily measurable, such as cement production or armaments, but do not present “relevant differences” compared to traditional funds on others. activities harmful to the environment, the study also notes.
The only clear positive point is that these funds are much more isolated from major environmental controversies, such as deforestation or oil spills, with a very significant difference compared to traditional funds.
Among their major shortcomings, these funds proceed by exclusion of risky activities, but “struggle to redirect more capital towards sustainable economic activities”, judges Greenpeace, which demands stricter criteria to be applied to them in particular at a time when the Federal Council (government) wants to make Switzerland a benchmark for sustainable finance.
At the end of May, the Swiss branch of the World Wildlife Fund (WWF) also called for more transparency on financial products in a study proposing a ranking of Swiss banks to monitor their progress in sustainable development.