As concerns about the implementation of ESG regulation grow, France’s markets watchdog AMF warned that the European Union’s standards for labeling sustainable investment funds need to be tightened to prevent “greenwashing”. Asset managers can categorize funds as sustainable thanks to the EU’s Sustainable Finance Disclosure Regulation (SFDR), however, the AMF suggested that this regulation be given a “targeted assessment” because it doesn’t specify what constitutes a sustainable investment or include any minimum standards.
The rules state:
- ESG regulations should focus more on providing direction
- Funds under Article 9 should not be invested in fossil fuel-related industries
- Investment in Article 8-required activities ought to be possible if all requirements are met
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