It may be the beginning of the end for asset managers who sell old funds in new green bottles. This week, a new EU regulation requires European fund groups to start backing up their claims of investing sustainably. The world’s largest, BlackRock, wrote to European clients on Wednesday promising to increase the proportion of investments that meet the EU guidelines.
Good intentions are yielding good inflows. Sustainable investment is becoming a sustainable business. But for the moment it lacks public credibility.
The EU plans to clamp down on “greenwashing” — marketing claims with little environmental substance. So it should. Investment companies will presumably charge a premium for funds trading under the shingle of ESG (environmental, social and governance standards).