ESG Fund Management Regulation: Greenwashing Under the Microscope

With regulations pending or under consideration, it will become increasingly difficult for greenwashing to proliferate at the fund level.  

November 29, 2022 – The U.S., the EU, and the U.K. have established or proposed rules around using the ESG label and how the industry can market and sell these products. These rules aim to protect investors from misselling (i.e., limit greenwashing by fund managers) and level the playing field by enabling fair product groupings and comparisons. Failure to market ESG products correctly represents a massive monetary, legal, and reputational risk for investment managers.

This Impact Report is the third in a series that focuses on the rise of regulatory efforts by policymakers to provide a framework for ESG fund categories and required reporting requirements. This report focuses on the impact ESG fund regulation has on the buy-side and highlights the view of capital markets firms on existing rules. It is based on Aite-Novarica Group’s Q3 2022 survey and interviews with capital market participants, mainly buy-side market participants.

Clients of Aite-Novarica Group’s Capital Markets service can download this report and the corresponding charts.

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