NEW YORK (S&P Global Ratings) Aug. 23, 2021--The focus on ESG initiatives worldwide, underpinned by legitimate risks and concerns important to market participants, has led to an inevitable and exponential rise in the volume of green claims made by companies as they attempt to demonstrate sustainability credentials to their stakeholders, according to the report "The Fear Of Greenwashing May Be Greater Than The Reality Across The Global Financial Markets," published today by S&P Global Ratings.
Sustainable bond issuance including green, social, sustainability, and sustainability-linked bonds could now collectively exceed $1 trillion in 2021. This growth trajectory is staggering; however, a lack of consistency in instrument labelling and post-issuance disclosure has raised investor fears that sustainability claims made by issuers might be overstated or unreliable--or what's known in the industry as "greenwashed."
"With ESG becoming mainstream, key stakeholders, including consumers and investors have started pressuring companies to demonstrate their ESG credentials either through commitments and actions at the corporate level, the products they offer, or the instruments they use for financing," said S&P Global sustainable finance analyst Lori Shapiro.
Regulations and principles could also help mitigate environmental, social, and governance (ESG) washing risks, although the road to global harmonization is long and winding.
This report does not constitute a rating action.
S&P Global Ratings, part of S&P Global Inc. (NYSE: SPGI), is the world's leading provider of independent credit risk research. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,400 credit analysts in 26 countries, and more than 150 years' experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information that helps to support the growth of transparent, liquid debt markets worldwide.
Primary Contact: | Lori Shapiro, CFA, Primary Contact, New York + 1 (212) 438 0424; lori.shapiro@spglobal.com |
Media Contact: | Arnaud Humblot, London + 44 20 7176 6685; Arnaud.Humblot@spglobal.com |
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