Fragility of ESG scores increase 'greenwashing' risk - Bank of Italy governor

The fragility and lack of transparency of environmental, social, and governance (ESG) indicators used by companies increase the risk of 'greenwashing', which must be contained with more and better data, the head of Italy's central bank said on Thursday.

"The fact that there is no obligation to oversee firms' non-financial communications, the absence of standardized indicators... leave room for firms to attempt to alter the external perception of their sustainability in order to attract funds," Ignazio Visco said at a conference.

Visco added that the demand for more and better data to measure the impact of climate change on the economy and the financial system was "strong", requiring "bold and urgent" coordination at the international level.

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