Explainer: Article 9 and its reputational risk for asset managers

Recent downgrades of SFDR Article 9 funds have left market participants in limbo while regulators contemplate further enforcement measures to counter greenwashing practices.

Article 9 funds – Europe’s greenest funds under the EU Sustainable Finance Disclosure Regulation, in force since March 2021 – have been hit by controversy in recent months. Besides facing accusations of alleged greenwashing, many Article 9 funds have been reclassified by asset managers across the EU, who claim the current definition of sustainable investment lacks clarity.