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Study Casts Doubt on Sustainability of EU’s Top ESG Funds

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Europe’s greenest fund category may not be as sustainable as its classification suggests, according to a report published on Thursday.

An analysis conducted by Clarity AI, a sustainability technology platform whose clients include BlackRock Inc., Aviva Plc and Deloitte, indicates that close to 20% of so-called Article 9 funds -- the EU’s top ESG category -- have more than 10% of their investments in companies “with violations of” the United Nations Global Compact principles, or the OECD’s guidelines for multinational enterprises. It found that 40% have more than 5% exposure.