The articles in the two urls below offer contrasting approaches by different countries to the issue of preventing greenwash in finance. In the first article, the Swiss government (rather optimistically) is happy to trust the firms in its finance industry to self-regulate:
"Switzerland's finance sector can regulate its own members when it comes to combating the miss-selling of sustainability-themed investment products, the government said. The Federal Council had given banks, insurers and other finance firms until August to come up with an effective self-regulation framework on greenwashing."
In contrast, and employing a modicum of commonsense, the Australian government is proposing to introduce a new labeling system that will add substance to the ambiguous meaning of sustainable:
"The Australian government … will establish labels and disclosures for investment products marketed as 'sustainable,' including funds run by the superannuation industry, after a public consultation in early 2025, according to a sustainable finance framework released on Wednesday. The plan also calls for large businesses and financial firms to incorporate climate disclosures based on the Australian Accounting Standards Board's guidelines, which are due to be finalized in August."
The key to the difference is in the article headlines – while the Swiss will allow finance firms to "police themselves," the Australian government is planning to "crack down with new regulations." I wonder which approach will be the most effective in reducing the amount of misleading information and behavior that pervades all things sustainable?
Take care
David
David Chandler
© Sage Publications, 2023
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Swiss Say Finance Firms Can Police Greenwashing Themselves
By Bastian Benrath
June 19, 2024
Bloomberg
Australia Cracks Down on ESG Claims with New Regulations
By Ishika Mookerjee
June 19, 2024
Bloomberg
