Can ESG ratings be trusted? Study examines the fight against greenwashing

A new study shows that sustainable finance relies on trust, but trust issues are increasingly focused on ESG rating providers, creating both a solution to greenwashing and a new regulatory risk. Comparing how the EU and UK regulate ESG rating companies, the authors find that policymakers are using “enhanced self-regulation,” combining public oversight and industry-based rules, to build confidence in emerging ESG markets and restore trust when credibility is called into question.