Reliable checks on companies' sustainability credentials will take years to develop, auditors have said, meaning investors pouring trillions of dollars into green funds remain at greater risk of being hoodwinked.
Given the demand for investments that support environmental, social and governance (ESG) goals, the pressure is on to ensure companies aren't exaggerating or misrepresenting the benefits of their activities — a phenomenon known as "greenwashing."
ESG auditing is in its infancy with no single global, mandatory standard. Efforts to create a more rigorous regime for this type of auditing are expected to take several years to bed down as investors, companies and auditors try to get a handle on new and complex data.
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