Investors are becoming increasingly concerned about greenwashing by companies.
However, most do not look at ESG ratings when trading, according new research shared with ESG Insight this morning.
The study found more than two out of three (67%) investors say they are concerned about greenwashing – companies making false or misleading statements about their environmental commitment.
Around a quarter (23%) say they are very concerned about companies greenwashing in order to boost the attractiveness of their shares, ETP provider GraniteShares fond.
ESG ratings
That concern may be translating into how importantly ESG is rated by traders and how much attention they pay to ESG ratings.
A lack of interest in ESG ratings – just one in three (35%) say they look at them when buying or trading shares. Around half (51%) say they don’t look at ESG ratings 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, shared this morning.
“Most investors do not read ESG ratings when buying or trading shares despite the huge focus from financial services companies on providing them.”
Will Rhind
“Investors are very much concerned about greenwashing and substantial numbers of investors regard ESG as an important topic.”
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.