The Future of Environmental Finance

Jean-Baptiste Vaujour is a Professor of Practice at emlyon business school where he teaches about consulting and green finance. He is an energy economist and a registered expert at the EU Commission and for the World Energy Council. He has recently published a book on the decarbonisation of the economy.   I recently read a paper by Gianpaolo Parise and Mirco Rubin called Green Window Dressing in which they present evidence of optimising behaviour from investment managers. This is part of a wider trope of unintended consequences of the current ESG reporting framework. We will discuss a few of these in the present article. Optimising timing There is a fundamental issue with the ESG disclosure framework as it is currently defined in the SFDR ( Sustainable Finance Disclosure Regulation ). The frequency of reporting for the SFDR and EU taxonomy alignment is yearly. Fund ESG performances are reported quarterly to asset managers. On the other hand, the financial performance of...