Call for wider ESG regulation after EU watchdog ‘greenwash’ warning

A call by the head of the EU’s financial watchdog for public authorities to regulate and supervise agencies issuing ratings on companies’ and financial products' exposure to climate and environmental risk to prevent “greenwashing” does not go far enough, an environment group has said.

Steven Maijoor, chair of the European Securities and Markets Authority (ESMA), said financial regulators should “step in and establish” robust and reliable environmental, social and governance (ESG) standards and “supervise the relevant actors and products to prevent the risk of greenwashing”.

To increase credibility of ESG standards, he told the European Financial Forum in Dublin on Wednesday, “it is necessary that they sit with public authorities” while responding to rigorous European and international standards.

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