European funds fret over merits and risks of ethical labels

Managers unsure whether to “aspire to” or “run away” from new ESG classifications for funds

ESG balance

Damned if they do and damned if they don’t. That is one way to describe the choice presented to asset managers in new European regulation. The choice is between an ethical and an ordinary label for their funds, and both come with risks.

In a subtler view of the problem, firms will face a complex task when the Sustainable Finance Disclosure Regulation (SFDR) comes into force on March 10. They will have to interpret the confusing rules, weighing up the pros and cons of each label, before deciding

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