Europe Investors Weigh Legal Steps After ESG Regulatory Rollback

After being bludgeoned in the US, ESG’s sudden regulatory decline in Europe has left institutional investors exploring new levers to force companies to take environmental, social and governance metrics more seriously.

Asset managers and asset owners based in northern Europe say they’re ready to cut allocations to companies they think are using a lack of regulations as an excuse to be less transparent about their ESG risks. In interviews with Bloomberg, they also say they’re ready to consider legal steps to protect their portfolios from climate change and human rights risks.

The development follows a major about-face in Europe, which ...