A review by Morningstar has found that almost a quarter of funds that claim to ‘promote’ sustainability under European regulations ‘don’t deserve an ESG label’.
According to Morningstar ESG analyst Boya Wang, the analysis – which looked at funds classified as Article 8 within the EU’s SFDR – shows that 23pc don’t live up to ESG investing principles.
Independent.ie said that the assessment is the latest to raise questions around a key pillar of Europe’s efforts to become a global champion of sustainability. It added that ‘no other jurisdiction has raced ahead with such an ambitious program for transforming the entire asset management industry’. However, even regulators are starting to warn that the process has left too many opportunities for greenwashing.
As part of the regulatory update, asset managers will need to include sustainability factors, risks and preferences into suitability assessments, in line with the ongoing ESG drive.
To help firms meet the new requirements, everyoneINVESTED released a sustainability module for its Profiler solution.
The ISAE 3402 Type I certification means the module has been suitably designed to ensure the sustainability preferences of clients and prospects are collected in accordance with the applicable legislation and the associated draft supervisory guidance of the European Securities and Markets Authority (ESMA).
Meanwhile, TradeSun, an AI-powered platform for trade compliance and automation, has partnered with data and analytics provider Coriolis Technologies to launch a new ESG solution.
The partnership will see the launch of an integrated solution for banks to measure and verify ESG performance across trade transactions.
This tool comes as a response to regulators applying pressure on companies to disclose more detail on ESG performance.
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