In a recent Financial Times article, Guillaume Prache, Senior advisor at BETTER FINANCE, criticizes the use of Article 8 funds in sustainable investing. He argues that increasing the minimum sustainable investment percentage in these funds is ineffective and prone to greenwashing. These funds often oversimplify sustainability as mere 'green activities' and predominantly use an exclusion approach in investing, leading to a concentration in sectors like software communication companies with lower carbon footprints. This approach inflates the share of companies with already low carbon footprints, rather than contributing to genuine environmental impact.
➡️ Read the full FT article here.
➡️ Read the BETTER FINANCE position on Transition Investing here.