ESG
The ESG Phenomenon: IQ-EQ Study

The latest developments in the ESG space.
IQ-EQ, a
Luxembourg-based investor services group, has published a
study which found that “greenwashing” concerns are actually
stifling ESG investments, as nearly two thirds of respondents
said that the fear of greenwashing is the number one reason
holding back investors from sustainability in their marketing
strategy or marketing their sustainable credentials.
“Greenwashing” is a term used to describe a misleading set of
claims made by an organisation about the positive impact a firm,
product or service has on the environment, and it has been
getting increasing attention lately.
“The lack of clear, universal ESG criteria continues to be a pain
point for investors as different authorities state different
standards,” the firm continued. “With its two-year anniversary
only just behind us, the EU’s Sustainable Finance Disclosure
Regulation (SFDR) has yet to serve its full purpose, with gaps in
understanding and compliance that ESMA is still struggling to
fill,” it said. “The regulator’s rules for the labelling of
Article 8 or 9 funds to prevent greenwashing have generated a
significant reaction from industry participants, who warn that
overly strict guidelines could undermine the intent of the
regulation. The new poll data from IQ-EQ certainly supports this
thinking.”
The results suggest that the legislation hasn’t been as effective
in providing clarity in the sector; consequently investors might
avoid ESG investments out of fears of miscommunication.
IQ-EQ's ESG director, Lyons O'Keeffe, said: “The poll result is
concerning, but not surprising. The lack of clarity from
global regulators is prompting investors to avoid ESG labelling
because of potential repercussions linked to greenwashing. Our
constant interactions with clients demonstrate that it’s not for
the want of trying, as investors are very interested in the
sector, however, they fear miscommunication will damage their
reputation, or worse. This suggests that clients require
additional support to engage in the right way; it’s key that the
investment industry does not shy away at this critical time.”
IQ-EQ operates across 24 jurisdictions, providing a range of
administration, compliance, asset and advisory services to fund
managers, multinational companies, private clients and family
offices operating with more than $750 billion in assets under
administration.