German investors are among those proposing that the German Government develops a sustainability rating for all financial market products.
A long-awaited report from Germany’s Sustainable Finance Committee - a group of private- and public-sector players appointed by the federal government to advise it on boosting ESG investing in the country - includes a recommendation that all financial products are rated from 1-5 based on how well they integrate sustainability standards.
The report says that it is currently “not possible for institutional and private investors to evaluate the positive and negative effects of investments on sustainability goals” because of a “lack of transparency”.
The recommended scale would apply to all financial products sold in Germany which are covered by the EU’s new Sustainable Finance Disclosures Regulation. The lowest rating (1) would indicate “increased ESG risk due to a lack of information”, and the highest (5) …