Navigating Greenwashing Risks: A Guide for Asset Managers by EY Switzerland

Sustainability now drives investment. Asset managers face more questions about greenwashing. This risk means false claims on a product’s eco benefits. EY Switzerland gives clear steps to handle these risks.

Understanding Greenwashing in Asset Management

Greenwashing happens when claims on sustainability lack clear evidence. Investors need facts that show how products meet Environmental, Social, and Governance goals.

Key points are:

• Rules differ across countries.
• Sustainability numbers are hard to track.
• Labels and words can cause doubt.

Regulatory Landscape Highlight

• EU Sustainable Finance Disclosure Regulation (SFDR): This rule uses a “shades of green” idea. It sorts financial products by how they handle sustainability.
• Swiss AMAS Self-Regulation: This rule sets basic marks for calling a product sustainable. It adds new points that challenge compliance.

Asset managers must know these changing rules. They must update how they work to avoid harm to their reputation and risks from regulators.

Strategies to Mitigate Greenwashing Risks

1. Robust Due Diligence and Verification
   Check facts with trusted, third-party proof. Use clear data to back ESG claims. For example, state the exact recycled content instead of using vague words like “eco-friendly.”

2. Clear and Consistent Labeling
   Use words that tell the truth. Do not use words like “all-natural” without facts. Such words can be right in a way but may mislead about safety and true sustainability.

3. Dynamic Compliance Framework
   Update rules often to match SFDR, AMAS, and other guidelines. This keeps work in line with best practices.

4. Transparent Reporting
   Share all details about sustainability measures. Explain how you calculate numbers. Show your assumptions and limits to build trust.

5. Cross-Functional Collaboration
   Let legal, compliance, sustainability, and portfolio teams work as one. This mix covers every side of greenwashing risks.

Conclusion

ESG now shapes investment. Asset managers must work hard against greenwashing with clear facts, honest reporting, and rule-following. EY advises smart action and regular updates to build trust and offer true sustainable value.

For asset managers who value sustainable finance, fighting greenwashing is more than a rule. It is a clear path to long-term trust and a strong edge in the market.

Source: EY Switzerland, “How can asset managers navigate greenwashing risks?”, October 2025.

Design Delight Studio curates high-impact, authoritative insights into sustainable and organic product trends, helping conscious consumers and innovative brands stay ahead in a fast-evolving green economy.