Can ESG ratings be trusted? Study examines the fight against greenwashing

A new study shows that sustainable finance relies on trust, but that trust challenges are increasingly focused on ESG rating providers, creating both a solution to greenwashing and a new regulatory risk. By comparing how the EU and the UK regulate ESG rating firms, the authors find that policymakers use "enhanced self-regulation," combining public oversight with industry-led rules, to build trust in emerging ESG markets and repair trust when credibility is questioned.