ESG criteria

ESG investment funds in Europe have sharply increased their exposure to defense stocks, according to new Morningstar data that offers the most comprehensive look yet at how sustainable finance is responding to geopolitical pressure.

ESG hasn’t disappeared. It is simply speaking a different language.

Asset managers are scrambling to rebrand their sustainable investment funds as stepped-up regulatory crackdowns on greenwashing risk deepening fragmentation in the industry, experts warned at the Morningstar Sustainable Investing Summit in Amsterdam.

It is very difficult to apply ESG criteria consistently to purely passive investments. Active investments lend themselves much better to this. It is easier to apply an integration approach that goes beyond exclusions in active management. In the end, it is all about the client’s profile, which has to match the risk/reward profile of a fund or strategy and the client’s sustainability preferences.