European Watchdogs Target Greenwashing With ESG Regulation Plan

Dec. 15, 2020, 1:50 PM

European authorities are calling for the regulation of ESG data and ratings, saying the move will boost transparency and consistency in the $40 trillion market for sustainable investments.

France’s Autorite des Marches Financiers and Dutch counterpart Autoriteit Financiele Markten are proposing a European-wide framework aimed at preventing misallocation of investments, greenwashing and ensuring investor protection, the watchdogs said in a statement Tuesday. It includes requirements on managing conflicts of interest, internal control processes and transparent methodologies.

Providers of sustainability-related services are largely unregulated currently even though the influence of environmental, social and governance data on investment decisions is increasing. The ...

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