European regulators have taken aim at asset managers using vague definitions of environmental, social, and governance investing. In March, the Sustainable Finance Disclosure Regulation introduced more stringent criteria before labeling anything ESG. In addition, there are different degrees of ESG assets (light to dark), quantifying their impact.
In response to the new rules, Allianz Global Investors, DWS Group, and other large fund managers began dropping the term ‘ESG integrated’ in their public documents, according to Bloomberg reports. U.S. and German regulators have also been looking into greenwashing accusations from Deutsche Bank’s former sustainability head, Desiree Fixler.
The U.S. is starting to have the same conversations, suggesting that ESG regulations could be forthcoming in the world’s largest financial markets. In fact, SEC Chair Gary Gensler said that ESG disclosure regulations would be central to his tenure.
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