Former AQR Partner Thinks Most Greenwashing Is Merely A Misunderstanding

European regulators have been cracking down on so-called “greenwashing” among fund managers, resulting in “mass frustration” among managers. In the last few weeks, some of the largest asset managers in the world have removed the much-sought-after ESG (environmental, social and governance) classifications from their funds.

ESG regulations cause chaos in Europe

However, that’s not the only source of decreases in the number of available ESG funds. In a recent survey, Jefferies uncovered an 84% decrease in fund reclassifications to include some element of ESG. Europe’s Sustainable Finance Disclosure Regulation was aimed at increasing transparency in sustainable investments and other ESG-related vehicles, but it appears to have reduced the number of available options available to investors.