It may be the beginning of the end for asset managers who sell old funds in new green bottles. 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.
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 . BlackRock, which has shifted its ESG stance from mysterious assenter to enthusiastic proponent, will raise the proportion of its funds committed to sustainable investing. Last year 62% of its fund launches met EU guidelines on ESG principles. This year that proportion will be 70%. But only 17% of outstanding assets under management covered by the new requirement met the target last year. BlackRock still has plenty of work to do.