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Hedge Funds Told They Can Ignore ‘Onerous’ ESG Investing Rule

July 5, 2022, 10:00 AM

Hedge fund managers eager to attract ESG client cash have won a concession that will make it easier for them to generate fees in the $40 trillion market for environmental, social and governance assets.

In response to calls for clarification of a key plank of European ESG rules, the EU Commission has said that smaller investment firms (defined as those with no more than 500 employees) are free to claim they’ve measured the so-called Principal Adverse Impact (PAI) of an individual fund product, without needing to quantify the entire firm’s impact. That’s a laxer interpretation of the rule than many ...