Sustainable finance: Too green to be true?

Sustainable finance has the potential to deliver benefits for retail investors and wider society. However, the EU’s sustainable finance framework is letting consumers down, as greenwashing in so-called ‘sustainable’ investment products is widespread.

In order to tackle greenwashing, the European Commission has committed to reviewing one of the key parts of this framework – the Sustainable Finance Disclosure Regulation (SFDR). Previous research, like the Eurobarometer on Retail Financial Services and Products, has concluded that a majority of consumers do not want their savings to fund activities that damage the planet.

However, more detailed evidence on what is important to consumers when investing sustainably is needed. This new BEUC survey explores the expectations and experiences of consumers in relation to sustainable finance products, allowing us to understand what these products should offer in practice.

We surveyed more than 10,000 consumers in 11 European countries and found that, despite significant consumer interest for sustainable investment products, consumers are actually put off by misleading or unreliable green claims.

We also found that consumers feel consistently less informed about sustainability aspects of their investments (compared to financial ones), and many consumers have misplaced trust that products comply with strict sustainability legislation.