ESG & Investing
EU Weighs Tighter Rules for ESG Funds on Greenwashing Concerns
- ESMA unveils draft guidelines to set label, investment limits
- EU’s financial market watchdogs are probing exaggerated claims
Europe’s three main regulators launched a joint review to determine how much greenwashing is going on in the financial industry.
Photographer: Jonne Roriz/Bloomberg
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European regulators are considering imposing tougher rules for ESG investment products amid growing concerns that fund managers are misleading investors.
The European Securities and Markets Authority is considering limiting the use of ESG or sustainability-related terms in fund names. The authority said it also may introduce “quantitative thresholds” for a minimum proportion of investments needed to back up fund names, which it called “powerful” marketing tools.