Transparency can prevent greenwashing

Greenwashing is the term used to describe the deceiving habit of pretending that certain companies and political parties, but also financial products and their providers, are more sustainable than they actually are. For private investors in particular, it can be very difficult to understand how sustainable an investment is and what positive or negative effects it has on the environment and society. Although ESG criteria have become established in the financial sector as a way of assessing sustainability, these criteria are determined, evaluated and weighted differently depending on the company and provider, and the corresponding information is not easily accessible to private investors. As a result, they lack the transparency they need to make sustainable investment decisions. In order to provide its clients with a reliable decision-making aid when investing, LGT has developed the LGT Sustainability Rating, which evaluates the sustainability quality of equities, bonds, investment funds and client portfolios. The rating is based on raw ESG data from recognized providers and is determined using LGT’s in-house rating tool, the LGT ESG Cockpit. In the case of companies, for example, the assessment goes beyond the usual standards in important areas by also taking into account public controversies relating to a company and its contribution to the implementation of the UN Sustainable Development Goals. The video explains how the rating works in more detail.