A certain news from Germany, an environmentally advanced country, has become a hot topic among market participants.
A German financial giant has been searched by the authorities for ESG investment.
"Did the authorities embark on the elimination of greenwash =" just-named ESG investment "? It's time to sort out from the boom."
An executive at a financial institution says.
What exactly is happening?
(Neil Kato, Reporter, Ministry of Economic Affairs)
Authorities move on suspicion of "greenwash"
May 31st.
The local media reported all at once that the prosecution and financial authorities had begun a home search for Deutsche Bank and its affiliated asset management company, DWS.
The reason the authorities have moved is suspicion over ESG investment.
Regarding DWS, a former executive accused last year that "ESG's efforts are exaggerated more than it really is", and the stock price fell sharply.
The company denied the accusation without grounds, but shortly after the search, Deutsche Bank announced the resignation of DWS CEO.
Environmental groups have often protested against the company's efforts to protect the environment but not to include its contents.
However, this time, surprises spread among market participants that the authorities launched a full-scale investigation.
These “name-only ESGs” are called Greenwash.
It is a coined word that combines "Whitewash", which means "only on the surface" or "fake", with "Green", which means environmentally friendly.
In other words, it means "a superficial environmental measure" and "the actual situation is different by pretending to be environmentally friendly".
Even in America ...
The movement over greenwash is also in the United States.
On May 23, the US Securities and Exchange Commission imposed a fine of $ 1.5 million, or about 200 million yen in Japanese yen, on an asset management company under the umbrella of financial giant Bank of New York Mellon. Was announced.
The Securities and Exchange Commission pointed out that there were false statements and insufficient information disclosure in the explanation of ESG-related investments.
In response to the company's explanation that all investments were ESG-rated, it was found that there were cases where they were not actually ESG-rated.
In the shadow of ESG investment market expansion
“ESG investment” continues to grow due to growing interest in the environment.
According to a survey result, the scale is 35 trillion dollars in total as of 2020, and about 4700 trillion yen in Japanese yen.
(Summary of the World Sustainable Investment Union)
The phenomenon called "Greenium" symbolizes its popularity.
This is a coined word that combines "green" and "premium" which means extra price.
For example, ESG corporate bonds are more expensive than regular corporate bonds, even if they are issued by the same company, and investors will receive lower yields in the future.
An increasing number of investors are willing to invest in ESG corporate bonds that lead to initiatives such as decarbonization, even if they have to pay extra prices.
As the market is expected to continue expanding in the future, leaving unrealized greenwashing unattended could hinder the growth of ESG investment.
This sense of crisis seems to be behind the authorities' move to eliminate.
Actually, the survey results that are of concern in Japan as well.
When the Financial Services Agency conducted a survey of 37 asset management companies that handle ESG investment trusts, 30% of the companies answered that they did not have a specialized ESG department.
In addition, 38% answered that they do not have specialized human resources.
It has become clear that about 30% of companies are not prepared for ESG investment.
Will the ESG market mature?
Under these circumstances, each country is embarking on establishing ESG standards and strengthening supervision.
In March last year, the EU began applying disclosure rules that require asset management companies to disclose ESG information on investees, and the United States is also aiming to introduce unified standards that strengthen ESG information disclosure.
In Japan as well, in order to improve trust in the ESG market, we will take necessary measures such as compiling supervisory guidelines regarding information disclosure of asset management companies and explanations to customers by the end of this fiscal year.
In the field of decarbonization, ESG investment is laborious, costly, and requires specialized knowledge, such as measuring greenhouse gas reduction effects and disclosing information.
Some market participants have pointed out that the words "eco" and "green" are mixed, and that it is a mixture of boulders, so the elimination of greenwash is welcome for serious business operators. "
ESG investment that not only returns investment, but also contributes to environmental conservation and social change.
In order not to end with a temporary boom, the key is how to build trust as a market and create an environment where you can invest with peace of mind.
Scheduled to pay attention
There are a series of central bank meetings that determine monetary policy in each country.
Attention is the announcement of the statement of the FOMC = Federal Open Market Committee and the meeting of the Fed Chairman Jerome Powell before dawn on the 16th in Japan time.
There is growing speculation that there will be a significant 0.5% rate hike at this and July meetings, but with record inflation continuing, market interest will be focused on whether this rate hike will continue after September. ..
The Bank of Japan's monetary policy decision meeting will be held from the 16th to the 17th.
Attention is paid to Mr. Kuroda's remarks regarding rising prices and the rekindling of the yen's depreciation.