Scientific Beta

Oxford Business Review: "While asset managers talk at length about the use of climate data to construct their ESG portfolios, many funds aren’t run “in a manner that is consistent with promoting such an impact,” EDHEC academics wrote in a 65-page report entitled “Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing.” A clear risk is the temptation to game the system to earn better scores rather than truly make a difference."

Oxford Business Review 02/10/2021

"(...) 88% of what guides a climate fund is what you would find behind any other, non-green investment. This conclusion by Paris-based business school EDHEC is tied to a more nuanced assessment of strategies behind climate-focused funds. While asset managers talk at length about the use of climate data to construct their ESG portfolios, many funds aren’t run “in a manner that is consistent with promoting such an impact,” EDHEC academics wrote in a 65-page report entitled “Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing.” A clear risk is the temptation to game the system to earn better scores rather than truly make a difference. Money managers, along with regulators, should reassess the investment standards and practices around climate alignment, said Felix Goltz, a member of the EDHEC-Scientific Beta research chair that compiled the study. Funds need to go beyond displaying the “green scores” of their portfolios and instead invest in stocks “in a way that provides incentives for companies to act on climate change.” (...)"