Investors Seek Clearer Definition of What ESG Means in EU
Europe needs to clarify what constitutes a sustainable investment product, as current rules aren’t clear.
(Bloomberg) -- Europe needs to clarify what constitutes a sustainable investment product, as current rules aren’t clear, according to a group of investors, academics and consumers convened to advise on regulations.
The Sustainable Finance Disclosure Regulation was designed to eliminate inflated claims of investments’ potential environmental, social and governance, or ESG, benefits. But confusion has continued since its implementation in March. Billions of dollars are stake, as demand for sustainable products soars.
The stakeholders group said it’s “important” from an investor protection perspective that there’s no confusion over what constitutes a sustainable product. In its report to ESMA, the group also said the interaction between SFDR and rules governing the sale of financial instruments, known as MiFID II, “is currently not clear at all.”
The plea comes as Europe considers a new strategy for encouraging retail investing, including addressing inconsistencies across regulations.
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