sustainability

The unexpected re-election of Donald Trump as President of the United States delivered an immediate shake-up on Wall Street Wednesday, creating clear winners and losers across sectors. Small-cap stocks surged while renewable energy and long-term bonds took a significant hit, reflecting investor expectations of a shift in economic and regulatory policies.

The regulations surrounding the European sustainable finance package seem to have entered somewhat calmer waters for now. Nevertheless, the topic of transition financing and transition investing remains relevant, especially as there is a need for clear frameworks and definitions.

In the apparently almost never-ending battle against greenwashing, the European Securities and Markets Authority (ESMA) set a next step by publishing, on 21 August 2024, its new guidelines on funds’ names using ESG or sustainability-related terms (the Guidelines).

Investors seeking to achieve real change through their impact investment will find that the passive approach isn’t as effective as an active one, explained John William Olsen (photo), fund manager of the M&G (Lux) Positive Impact fund and the Global Sustain Paris Aligned Fund.

Esma’s new guidelnies on using ESG or sustainability related terms in fund names may have massive implications for fund managers, writes Sebatiaan Hooghiemstra.

Luxembourg’s fund and asset management association Alfi has told Europe’s financial markets supervisor Esma that its proposed rules on the use of ESG-related names in investment fund names lack clarity and will render the marketing of these funds more difficult.

The Sustainable Finance Disclosure Regulation marks its second anniversary next month. Although it was quickly adopted as a sustainability label, its actual purpose was to provide a framework for communicating the extent to which sustainability plays a role within an investment fund. Adjusted rules that took effect in January 2023 caused a stir in the sustainable fund landscape.

Regulatory uncertainty that the industry is contending with as a result of the complex range of interacting legal requirements, Efama, the EU’s main trade body for asset management, said. Luxembourg’s Alfi argued that “the element of intent” needs to be considered when making judgements on greenwashing.

Fintech firms see a role for themselves in assisting and enabling the Luxembourg financial centre’s strong move towards sustainable investing, but call for collaboration and support from the financial industry and the Luxembourg government to make this work.

British activist investor Bluebell Capital Partners is aiming its guns at BlackRock, the world’s biggest asset manager, and its CEO Larry Fink, criticising the firm for its ‘hypocrisy’ over its ESG and sustainability practices while drawing attention to its failure to exercise proper ESG stewardship. The asset manager’s behaviour risks becoming “an obstructive force” to the effective functioning of capitalism, it said, calling for Fink to step down.