Article: Overseas Disclosure Rules Lead some Asset Managers to Nix ESG Labels.
Summary: Under regulatory pressure, Asset Managers are removing the label “ESG-Integration” from their funds.
At this very moment we are seeing an important shift in the regulation of ESG Investing. Europe’s SFDR is really a steppingstone in ESG regulation. The question is if it would make an impact or if the market would find ways around it?
The article describes the tangible impact of the regulation coming into effect. As written in the article, “DWS reported $536 billion in integrated ESG assets at the end of last year. By the second quarter, after the introduction of SFDR, the integrated figure had disappeared. Instead, investors were left with an “ESG dedicated” figure, which had slipped to $81 billion at the end of 2020.”
Clearly, there is still a problem with definitions and the clarity around what qualifies as “ESG investing.” Nevertheless, it is a sign that the regulation is forcing asset managers to rethink and improve the labelling their financial products. Perfect regulation is a while away. For now, putting pressure on asset managers and issuers to stop greenwashing their products is a good step.
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