What’s the latest? The European Commission (EC) drafted a proposal for its much-anticipated sustainable investing taxonomy right at the close of 2021.
The taxonomy creates a common set of criteria to determine which economic activities are sustainable, giving investment firms a metric to screen potential investments.
Why does this matter? Environmental, social, and governance (ESG) investing has taken the asset management industry by storm amid rocketing investor interest—but the space has been plagued by accusations of greenwashing.
The role of fintech: Common standards will help to mitigate inconsistencies in company scoring and reporting, but data scarcity remains a thorn in ESG’s side. Fintechs can help with this.
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