ASSET managers have now removed the European Union’s top ESG designation from at least $125 billion in portfolio funds, as figures from Axa Investment Managers add to the industry total.
Asset managers including BlackRock Inc., Amundi SA and Goldman Sachs Group Inc.’s NN Investment Partners are among those to have stripped the Article 9 designation from funds after the EU said it must be reserved for 100 percent sustainable investments, with some allowances for hedging and liquidity. That’s a threshold that less than 5 percent of Article 9 funds actually meet, Morningstar Inc. said in its third-quarter analysis of the industry.
ESMA chair, Verena Ross, has made clear she’s intent on “investigating greenwashing more closely.” What a fund calls itself “is one of the most significant identifiers of investment funds for investors, especially retail investors, and a great marketing tool,” she said in a December 6 speech. Axa’s head of sustainability coordination and governance, Clémence Humeau, has said the firm’s goal is to “explain the long-term intention and the short-term challenges” of the EU rules to clients. It’s all about being “proactive and transparent in our communications with clients,” she said in October.“There is now a widespread understanding within the industry of the limitations of the system,” Humeau said.
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