Critics of Luxembourg’s emerging green finance sector have talked about the potential of “green washing”, while supporters point to the sector's positive image for the nation’s branding.
In an article published by Liser (Luxembourg Institute of Socio-economic Research) on its website, on 21 March 2018, the existing potential and “missing links” between the financial industry and local businesses looking to adopt more sustainable practices were discussed, including citing “more critical commentators point[ing] to possible ‘green washing’ effects.”
They found that many green assets are still being managed from the narrow point of view of shareholder value. They then contrasted green finance practices with those of alternative investing, seeking to find potential commonalities.
According to the article, “Both approaches subscribe to apparently contradictory ideologies. However…we seek to establish a constructive dialogue between the opposing models of green capitalism and alternative economies to identify potential points of intersection.”
The paper concludes that, “The momentum of alternative endeavours remains fragmented…but green endeavours are well on their way.”
That said, it also noted that, “Whilst supporters of Luxembourg's emerging green finance profile recognise its positive impact on the country's national branding, in combination with economic stimuli, more critical commentators point to possible green washing effects.”
According to the authors:
“‘Green washing’ consists in greening the image of a product, a company, by giving a virtuous image without offering a sustainable service. It is an act of consumer deception concerning environmental practices or environmental benefits of a product or service that are announced but not carried out in practice by a company.”