Investors are becoming increasingly concerned about greenwashing by the companies they pump cash in.
However, most do not look at ESG ratings, according to new research shared with Net Zero Investor.
The fresh investor study found more than two out of three investors say they are concerned about greenwashing – companies making false or misleading statements about their environmental commitment.
Around a quarter say they are very concerned about companies greenwashing in order to boost the attractiveness of their shares, London-based GraniteShares found.
ESG ratings
That concern may be translating into how importantly ESG is rated and how much attention is paid to green ratings.
Firstly, a lack of interest in ESG ratings is evident with just one in three saying they look at rankings and ratings when acquiring shares. Around half say they don’t look at ESG ratings at all while 14% don’t know whether they look.
“It is clearly good that some companies are taking their ESG responsibilities seriously but there is a strong sense that investors feel claims about ESG and the environment are being overstated,” Will Rhind, founder and CEO at GraniteShares in London, shared this morning.
Most investors do not read ESG ratings despite the huge focus from financial services companies on providing them.
“Investors are very much concerned about greenwashing and substantial numbers of investors regard ESG as an important topic," he added.
However, around half (45%) of investors say ESG is important in relation to their share buying but just 17% say it is very important.
By contrast, 37% say it is neither important nor unimportant while 18% say it is unimportant with 10% saying ESG is not at all important.
