UZ 49 Webinar "Transparency and how it can help prevent greenwashing".

Since green and sustainable investments have become more visible in the market, debates about greenwashing in the financial industry have also increased. Surveys among investors show that potential greenwashing is an obstacle for investors to invest sustainably. One way to combat this is to consistently ensure transparency so that investors can make informed investment decisions based on the information provided. For this reason, the EU has set a series of binding disclosure and transparency standards for European financial market participants and their products in its Sustainable Finance Action Plan.

Regulatory overview of current EU transparency requirements for sustainable financial products

However, transparency alone says nothing about the actual sustainability quality of financial products. However, transparency is the basis for determining the quality of sustainability. For this reason, qualitative quality labels such as the Austrian Ecolabel for sustainable financial products focus on transparency. Specifically, the Ecolabel's inspection body assesses the completeness and transparency of the presentation on the basis of the European transparency guidelines for sustainability funds of EUROSIF (European Sustainable and Responsible Investment Forum). However, this so-called transparency code expires in 2023.

For this reason, the webinar from the series "Green Money for Green Investments" on 14 September 2023 was dedicated on the one hand to the question of the ways and instruments that can be used to ensure transparency in sustainable financial products. On the other hand, the webinar dealt with the question of the extent to which transparency alone is sufficient to ensure sustainability on the financial market.

The first input was provided by Georg Lehecka, Sustainable Finance Expert at the Financial Market Authority, with a regulatory overview of the current EU transparency requirements for sustainable financial products such as the EU Disclosure Regulation (SFDR) or the "Guidelines on ESG/Sustainability in Fund Names" of the European Securities and Markets Authority ESMA. For the disclosure according to SFDR, funds that take sustainability-related aspects into account must be classified (so-called Art. 8 and Art. 9 funds). These currently account for 43% of the total fund market in Austria. Sustainability has arrived in the mainstream of the fund market, as these figures impressively prove. Furthermore, Georg Lehecka pointed out in his presentation that the FMA will place an increased supervisory focus on greenwashing in 2023.

FNG Fund Profiles

In the second presentation of the webinar, Bernhard Engl, Chairman of the Board of the FNG - Forum Nachhaltige Geldanlagen, presented the "FNG Fund Profiles". These fund profiles provide an easy-to-read overview of sustainable investment strategies and relevant key data of sustainable investment funds. With now more than 600 fund profiles, the FNG wants to contribute to transparency and thus support investors and financial advisors. Bernhard Engl explicitly pointed out that these profiles are neither investment recommendations nor an assessment of the sustainability of a fund.

Insights from a (European) consumer perspective

Under the title "Transparency is good. Product standards are better", Julian Müller, Sustainable Finance Officer, BEUC - The European Consumer Organisation, provided an insight from a (European) consumer perspective. He sees a general problem with product quality and believes that products are less sustainable than promised. He does not see the industry as deliberately deceiving or breaking the law. He sees weaknesses and vagueness in the legal framework, coupled with a high demand for sustainable financial products.

He calls for a "genuine product standard for investment products with robust definitions, labels, minimum requirements and obligation for independent verification of products".

Ecolabel for sustainable financial products (VKI)

Insights into the transparency of the Austrian Ecolabel for sustainable financial products were provided by Raphael Fink from the Ecolabel team of the Association for Consumer Information. As of 13 September, 317 financial products are certified with the Ecolabel. With the expiry of the Eurosif Transparency Code and the changed legal framework, changes are needed in the transparency obligations in the Ecolabel Directive, which is being revised this year. Raphael Fink sees important orientation aids for consumers and companies in the labels and names transparency, participation and independence as central aspects of credible quality labels.

After the presentations, the speakers answered the interested questions of the webinar participants. Josef Behofsics from the Ministry of Climate Protection thanked the speakers for their exciting presentations and all participants for their questions and contributions. Susanne Hasenhüttl, ÖGUT, who moderated the webinar, closed the event with the information that the presentations will be made available on the ÖGUT website in the course of the week.

The webinar was conducted by ÖGUT on behalf of the Ministry of Climate Protection and in cooperation with VKI/Umweltzeichen. The individual presentations are available for download on the ÖGUT website: https://www.oegut.at/de/events/2023/09/uz-webinar-mit-transparenz-greenwashing-verhindern.php