New rules must guard against ‘green-bleaching’, warns Esma stakeholder group

Investment firms’ recent downgrading of many Article 9 funds to Article 8 status is amplifying the debate on how regulators combat greenwashing.

A stakeholder group of the European Securities and Markets Authority is urging EU watchdogs to address the issue of “green-bleaching” alongside any potential legislation to counter greenwashing. Green-bleaching refers to the decision by financial market participants not to claim their products or services have certain ESG characteristics in order to avoid extra regulation or legal risks.