Quarter of Article 8 Funds Greenwash

New analysis published by ESG and impact data provider MainStreet Partners has found that 24% of all funds categorised as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) could be at risk of greenwashing. This marked a four percentage point increase compared to 2022 findings, the ESG Barometer 2024 report suggested. The report also noted a 20% year-on-year (yoy) increase in the number of funds classified as Article 8, and a 24% yoy decrease in those falling under the Article 6 category. The findings formed part of the report’s analysis of sustainability-related trends across 7,700 funds offered by more than 350 asset managers, collectively responsible for more than €10 trillion (US$10.8 trillion). “2023 was a challenging year for asset managers on many fronts, including responding to regulatory changes in sustainable investing,” said Neill Blanks, Managing Director at MainStreet Partners. “In helping asset managers anticipate the needs of investors, we urge them to look beyond operational sustainability to understand how companies play into global ecosystems.” This, Blanks explained, could provide clarity on supply chain resilience or exposure to ESG-related issues, as well as help identify companies with innovative business models. “It is through actions like these that asset managers can meet their regulatory obligations, and – importantly – identify and avoid allegations of greenwashing,” he added.

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