London — Funds that invest in “brown” or polluting companies would be hit far harder than environmentally friendly “green” funds in a climate-related market shock, the EU’s securities watchdog said on Wednesday in its first study of its kind.
“Within the European financial sector, investment funds are more exposed to climate-sensitive economic sectors than banks, insurers and pension funds. However, few investment fund climate-related financial risk assessments have been conducted,” Esma said in its latest summary of market risks. “This suggests greater concentration risks existing across funds whose portfolios contain more polluting assets,” Esma said.