ESG

European funds must sell $40bn of stocks to keep ‘ESG’ label

Some 1,600 funds would be forced to rebrand unless they divest under tougher Esma rules, according to Morningstar Sustainalytics

New labelling regime means asset managers face tough choices on whether to get rid of stocks that don’t fit green criteria
New labelling regime means asset managers face tough choices on whether to get rid of stocks that don’t fit green criteria Photo: Getty Images

Over a thousand funds are under pressure to drop ESG from their names or fall foul of new European rules designed to clamp down on greenwashing.

The funds could be forced to divest $40bn of stock if they want to keep the branding, according to a new report by Morningstar Sustainalytics. 

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