Investors Plead for Clearer Definition of What ESG Means in EU

Europe needs to clarify what constitutes a sustainable investment product, as current rules aren’t clear, according to a group of investors, academics and consumers convened to advise on regulations.

Whether a financial product can be called “sustainable” or “ESG” if it isn’t categorized as green under Europe’s new disclosure regulation is still up for debate, the Securities and Markets Stakeholders Group said in a report to the European Securities and Markets Authority published on Tuesday.

The Sustainable Finance Disclosure Regulation was designed to eliminate inflated claims of investments’ potential environmental, social and governance, or ESG, benefits. But confusion has ...