As the Trump administration has proven by the past, scepticism is always present when it comes to climate change and the impact of human activity on it. Scepticism is also present when we talk about ESG criteria or Sustainable Finance. Around one third of the finance professionals view the Environmental, Social and Governance through the lens of negative screening without trying to understand the deeper context.
Globally, and similar to climate change, scepticism on Sustainable Finance is massively due to lack of knowledge and lack of clear and common definitions for its key concepts. How many people talk about Sustainable Finance without having a clear point of view on the issue?
Thanks to regulatory pressures and public opinion, Sustainable Finance is becoming THE new standard for financial centers across Europe. However, this lack of knowledge and not having a common basis are still present. Everybody knows what is an equity or a bond but few have a clear understanding of Green Bonds, Impact Investing or positive or negative screening… To fight against such skepticism, education, as usual, will be an essential tool to creating standards in Sustainable Finance.
Initiatives such as the EFPA ESG Advisor certification, which was launched in 2021 in 13 countries across Europe by the European Financial Planning Association (EFPA) can help to close the gap between the current level of information and the level necessary due to increasing regulatory requirements around the integration of ESG criterion.