Greenwashing in sustainable asset management poses a legal and reputational risk for the Swiss financial centre and is not compatible with achieving the goal of a leading international Swiss sustainability hub.
Greenwashing commonly means that financial institutions or asset managers pretend that their products or services do more for sustainability or climate protection than it is actually the case. However, the integrity of financial products is of central importance for the Swiss financial centre and the asset management industry.
AMAS therefore rejects any form of greenwashing and has set itself the goal of contributing to the prevention of greenwashing and ensuring the credibility of the Swiss financial centre with commitment and its own measures (read the position paper on greenwashing). These include the "Recommendations on minimum requirements and transparency for sustainable financial products and investment approaches".
The "Self-regulation on transparency and disclosure for sustainability-related collective assets", which will come into force in September 2023, aims to establish the quality of sustainability-related collective investment schemes through binding standards for AMAS members and transparency through comprehensive documentation and reporting obligations.
In asset management, greenwashing can occur at all points in the value chain, notably in three operational areas:
- at company level if sustainable investment approaches are implemented poorly due to a lack of solid investment processes and if investment controlling, risk management, and ESG data analysis are still insufficient;
- at product level if sustainable practices and product features are described in a manner that is not transparent or is incorrect; and
- at the point of sale if the product information provided as part of the advisory process is inaccurate or incomplete.
The problem of greenwashing accusations
One problem of greenwashing is revealed by the fact that in many cases the terms and investment strategies in the field of sustainable asset management are not yet clearly defined and are understood in different ways. Accordingly, the discussion about greenwashing is not only conducted along objective criteria.
Accusations of greenwashing can also arise from the subjective perspective of investors and on the basis of individual values that are reflected in financial products or portfolios, but which can change as a result of economic, social or ecological developments as well as geopolitical events.