Why Comparability is a Greater Problem Than Greenwashing in ESG ETFs
13(2) William & Mary Business Law Review 441 (2022)
2021
- 2,915Usage
- 3Captures
Metric Options: CountsSelecting the 1-year or 3-year option will change the metrics count to percentiles, illustrating how an article or review compares to other articles or reviews within the selected time period in the same journal. Selecting the 1-year option compares the metrics against other articles/reviews that were also published in the same calendar year. Selecting the 3-year option compares the metrics against other articles/reviews that were also published in the same calendar year plus the two years prior.
Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
Paper Description
This article argues that comparability in environmental, social, and governance (ESG) exchange traded funds (ETFs) is a much greater problem than greenwashing. Rising demand for sustainable investment products in recent years has been met with an explosion in ESG ETF varieties, and numerous ESG-themed funds have captured massive capital inflows. There is little evidence, however, that deceptive “greenwashing” is widespread in ETFs. ETF issuers face significant reputational costs from such behavior, and there are effectively no consumer switching costs for hyper-liquid, easily accessible ETFs. While non-deceptive practices of asset-managers are observable in the zero-sum, highly competitive, asset management game of capturing new ESG-directed capital flows, the subjectivity that ETF issuers use to integrate ESG considerations into the composition of underlying ETF holdings is so disparate that investors face tremendous information acquisition and synthesis costs, and difficulty comparing products. This dilemma grows as product choice expands. ESG ETFs also create unique issuer and commercial index provider conflicts. An investor focused regulatory framework for ESG ETFs would aid comparability, standardization, and consistent product marketing presentation. To this end, this article builds on the author’s prior work on comparative complexity in ETFs by advancing three immediate measures to improve comparability and facilitate more efficient capital allocation in ESG ETF varieties: first, require justification of a fund’s usage of ESG terminology in its name through specific ETF disclosures; second, standardize ESG measurement metrics; and third, mandate uniform information presentation layouts on ETF issuer websites.
Bibliographic Details
Provide Feedback
Have ideas for a new metric? Would you like to see something else here?Let us know