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Global regulators must work together on an international framework to stamp out potential ‘greenwashing’ as capital inflows increase, said Nigel Green, CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The call-to-action from deVere Group’s Nigel Green comes on the back of COP26, at which governments and institutional and retail investors pledged more financing for environmental, social and governance (ESG) orientated initiatives.

“COP26 has galvanised the ESG gold rush that has been taking place over the last year, as an increasing number of investors pursue profits with a purpose with sustainable investments,” Green said.

ESG-compliant investment decision is the hottest investment megatrend and this is set to grow as global financial powerhouse companies are helping to unlock and mobilise the trillions of dollars of private finance that is urgently required to halt the worst effects of human-created global warming, according to Green.

To ensure that this flood of private money continues and is put to work in the right way, he advocated the need for global regulators to work together on an international framework of standards. This will help prevent greenwashing, which is the term for misleading environmental claims, and could damage the essential credibility to guarantee the inflows are maintained.

Although regulators have recently been ramping up scrutiny in regard to greenwashing, more still needs to be done, said Green, adding that the world needs what he calls “joined-up thinking” on a global level to tackle a global issue. He warned that failure to do so will severely compromise the mission.

deVere Group has pledged to position $2 billion of assets under advisement into ESG investments within five years. The Group is also one of 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of powerhouse global finance companies that will help accelerate the transition to a net zero financial system. Its membership means it is committed to “aligning all relevant products and services to achieve net zero greenhouse gases by 2050 and to set meaningful interim targets for 2025.”

The organisation has also confirmed that it aims to significantly speed-up its own meeting of the science-based targets to reduce operational emissions in line with limiting global temperature rises to 1.5 degrees Centigrade.

“COP26 has put environmental concerns front and centre, now we need regulators to help shore-up the industry to ensure the avalanche of private money is not cut off at this critical time. This means internationally-approved, enforceable anti-greenwashing rules,” Green concluded.

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12 billion under advisement.