ESG fund shake-up: New EU rules trigger industry overhaul
In response to new regulations from the European Securities and Markets Authority, asset managers in Europe are bracing for a seismic shift in the ESG fund landscape. Morningstar Sustainalytics predicts a significant impact, with potentially 4,300 funds affected. With stricter guidelines requiring 80% of assets to align with fund names and exclusion of certain companies, Morningstar projects up to $40 billion in stock divestments. This move aims to combat concerns of greenwashing, yet highlights the industry's need for clearer standards.
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By Frances Scwartzkopff
New rules limiting how freely asset managers can attach the ESG label to funds sold in Europe promise to trigger a widespread purge across the industry, according to a fresh analysis by Morningstar Sustainalytics.
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