Greenwashing – A Sign Of Maturing Market

Jon Duncan 12 March 2024

Greenwashing – A Sign Of Maturing Market

Greenwashing is a problem, but also a sign of how far the world of green/sustainable investment ideas has gone, according to the author of this article – the chief impact officer of Reyl Intesa Sanpaolo.

The following article comes from Jon Duncan, chief impact officer at Geneva-based Reyl Intesa Sanpaolo. This news service recently met Jon to talk about how the world of ESG/sustainability is evolving and what the role of private banking in that area should, or could, be. 

Jon has insightful views on the field (more about the author below). This news service is pleased to publish his views on “greenwashing” – the dressing up of investment and business in the garb of environmentalism in order to encourage clients to invest in that sector. Regulators have sought to stamp out greenwashing, fearful that it could discredit the whole field. Sharp gyrations in energy markets in 2022 and Russia’s invasion of Ukraine prompted investors to push back – perhaps with justice – against certain forms of “green” thinking. There have even been lawsuits in the US in this area. 

With all this going on, Jon’s comments are particularly timely. The editors are pleased to share these views; the usual disclaimers apply. Remember to jump into the conversation! Email

Jon Duncan

2023 saw a sharp increase in reported allegations of greenwashing, notably in the energy and finance sectors (1). In many cases, these allegations resulted in formal legal proceedings and in some instances fines (2). Tackling greenwashing in this way is a welcome sign of a healthy functioning market and should not be mistaken for evidence that the science of sustainability is a “woke leftie agenda” to be rooted out of the “free market.” Dismissing sustainability risks on this basis is a classic case of throwing the proverbial scientific baby out with the bathwater.

Our current global understanding of sustainability issues is well supported by a diverse set of international academic institutions focusing on complex system science. Supporting the development of this collective understanding is the rapid growth of real-time geospatial monitoring of water, air, soil, pollution, and biodiversity metrics along with a step change in both computing and processing power. This fast-growing set of satellite and real time monitoring technologies provides a strong evidence-based view of the emergent system risks facing the planet. While there is growing consensus amongst global scientific bodies that sustainability risks are material, there is also a growing political divide about the solutions.

Within the US, there are several politicians pushing “anti-ESG” rhetoric, while in the EU there is political push-back on the green economy and decarbonisation plans, which some say clash with national labour and economic self-interests. As the broad topic of sustainability becomes increasingly politicised, what has become clearer is that ’greenwashing’ is simply “evidence” of the persistent market tendency to mis-sell products and, on this point, ‘green finance’ is no exception.

Managing expectations – “direct” versus “indirect” impact
Further evidence of the maturing world of sustainable finance is the growing appreciation of the difference between direct and indirect impact. In simple terms publicly traded, liquid securities mostly offer indirect impact, achieved via exposure to companies with lower levels of operational ESG risks and/or enhanced exposure to “green revenues”. Direct impact, on the other hand, is best achieved through exposure to private market assets, e.g. private equity investment in an alternative protein business, or private debt allocation to renewable infrastructure or affordable housing.  Achieving direct impact via the liquid public markets is currently limited to ‘green/sustainable bonds’ and select niche equity strategies.

Ticket size and liquidity concerns have historically resulted in the private markets being underrepresented in wealth portfolios. Average portfolio exposure across various global wealth markets ranges from 8 per cent and 12 per cent, with real estate being the favoured private market “alternative.” For comparison, the 2023 BlackRock Global Private Markets Survey indicates that global institutional investors have an average 24 per cent allocation to private markets (3). Harvard Endowment is famous for its pioneering large scale, long-term allocation to private markets, with a current 39 per cent allocation to private equity alone. Within the family office and high net worth investor community, there is a growing appetite for private market assets, driven by diversification benefits, as well as a growing recognition that this asset class provides direct access to the emerging green economy opportunity set.

Growing demand drives innovation for access to private markets
In recognition of this growing demand from the wealth market, several platforms, such as Moonfare and iCapital, have emerged offering digital access to private market assets. Most of these platforms provide access to opportunities that have been through institutional-level due diligence, have transparent pricing/valuations, allow for digital onboarding/reporting and importantly, allow for reduced ticket sizes.

From an impact perspective, it is encouraging to see that these digital platforms naturally reflect the emergent business opportunities associated with low-carbon, resource-efficient and socially inclusive outcomes, i.e. automated soil carbon reporting, plastic waste recycling, or micro off-grid energy companies. This technology-enabled alignment between long-term private capital, private market assets, and green economic growth opportunities is a positive trend for the world of sustainable finance in general, and for high net worth/wealth investors in particular.

(This news service has also just launched its latest Wealth For Good Awards, giving participants in the global wealth management industry the opportunity to demonstrate their commitment to and pre-eminence in the areas of ESG, impact, diversity and inclusion. For more details about this awards programme, click on this link, which includes information about the judges, categories and sponsors.) 


[1] Banks behind 70 per cent jump in greenwashing incidents in 2023 -report | Reuters/others

[2] DWS to pay $25 million to end US probe into greenwashing, other issues | Reuters



About the author

Jon Duncan began his career in 1996 in South Africa, where he worked in environmental research, consulting, and engineering. As a senior sustainability researcher and consultant at Trialogue between 2004 and 2006, Jon designed and implemented corporate sustainability and social investment strategies. In 2006, he became a partner at Environmental Resource Management, a firm focused on climate and sustainability for Southern Africa, where he worked at enhancing businesses’ understanding and ability to manage the key risks and opportunities presented by sustainability and climate change.

In 2011, Jon became head of the Group Responsible Investment Program for Old Mutual. In that role, he led the development and implementation of the Responsible Investment Program across the business’ global operations. He developed Old Mutual’s ESG research and analysis capabilities, developed ESG integration and sustainability focused product propositions across the various investment capabilities and asset classes, and led the business’ engagement with key stakeholders including regulators, academia, clients and the media, as well as industry associations. Jon joined REYL in 2022 as chief impact officer.

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