Regulating the $41 trillion green finance market

One of the fastest growing and largely unregulated sectors is the green finance market. The EU is looking to change that! :deciduous_tree:

As the below article shares, they aim to establish common definitions for green investments and to weed out misleading practices known as “greenwashing” - calling products sustainable even if they don’t really help fight climate change.

The impact could be potentially massive. More than US$30 trillion of funds were held in sustainable or green investments at the start of 2018, the most recent figure available from the Global Sustainable Investment Alliance, which tracks such money flows in five regions across the globe. Almost half of that is domiciled in Europe.

The proposed regulations would bring more transparency to green bonds, funds and other products, requiring them to release information on the sustainability of the investments. :deciduous_tree::money_with_wings:

Money managers say they’re in favour of common standards for green investments, as long as they’re not told how to run their funds or forced to immediately report green metrics for all of their holdings.

Europe has also led the initiative to harmonise efforts at the global level, creating an “International Platform on Sustainable Finance” together with countries including China and Canada. China has been among the first nations to regulate green finance, though its practices are mainly focused on domestic objectives such as pollution and less on fighting global climate change.

What do you think about this? A step in the right direction for greater transparency and sustainability?

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