On 19 November 2021, the European Securities and Markets Authority (ESMA) published a speech by its chair, Verena Ross.

In her speech Mrs Ross covers three issues:

• The growing importance of ESG in finance and the risk of greenwashing. The ESMA observes that the rapidly growing demand for ESG products coupled with a  regulatory regime that is still in the making creates a clear risk of distortions and even manipulation in the marketplace. The most common type of distortion is generally referred to as “greenwashing” or “ESG-washing”. The ESMA is currently planning its activities for the coming years in relation to ESG and sustainable finance in general. The topic of greenwashing will play an important role in these activities.
• Transparent and reliable disclosures. As with all novel areas of legislation, some practical difficulties may exist. For example, the ESMA knows there may be challenges with the implementation timelines of key acts such as the Sustainable Finance Disclosure Regulation and the Taxonomy Regulation or with the lack of complete and comparable data sets due to the fact that the corporate disclosure regime is still work in progress.
• Capacity building in sustainable investing. While the necessary transparency measures are being put in place and are being duly supervised, the ESMA also acknowledges the importance of fostering financial literacy through financial education initiatives focusing on sustainable investing.