Scientific Beta

FS Sustainability: "ASIC's latest roll call of greenwashing interventions highlights a flaw in ESG ratings as a reliable metric for fund managers, a global index provider says. Referencing an ASIC report, Scientific Beta argues ratings often mislead consumers on the sustainability of investment products. "

FS Sustainability 04/09/2024

"(...) ASIC's latest roll call of greenwashing interventions highlights a flaw in ESG ratings as a reliable metric for fund managers, a global index provider says. Referencing an ASIC report, Scientific Beta argues ratings often mislead consumers on the sustainability of investment products. "Sustainability-related information, like any other, should be accurate, based on reasonable grounds and be easily understood by investors," ASIC commissioner Kate O'Rourke had said. Yet Scientific Beta deputy CEO and index director Daniel Aguet said ESG ratings fail ASIC's test across these three conditions. "They are not accurate, not reasonably grounded and not understood by investors," he said. "Until ESG ratings can reasonably accurately measure what their providers intend them to measure, and until investors understand what these intentions are, ESG ratings are a source of investor misinformation." (...)"