BlackRock notifies investors of changes to over 100 ESG funds

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🗞️ Driving the news: BlackRock has informed investors of changes to 135 ESG-labelled funds in response to new EU rules from the European Securities and Markets Authority (ESMA)
• The changes include adjustments to fund names, investment methodologies, and exclusion criteria to comply with stricter ESG naming requirements
• The revisions impact over US$185 billion in assets under management

🔭 The context: ESMA now requires that funds using ESG-related terms in their names invest at least 80% in aligned assets, and at least 50% in sustainable assets if using sustainability-specific terms
• The regulations aim to curb greenwashing and bring consistency across the EU’s sustainable finance market
• Asset managers across Europe are undergoing similar changes, with dozens already dropping ESG labels from funds

🌍 Why it matters for the planet: Stricter fund labelling rules help ensure ESG investments are credible and transparent
• Improved standards can rebuild trust in sustainable finance and prevent the misallocation of capital into funds that do not meet ESG criteria
• This move strengthens the EU’s position as a global leader in regulating green finance

⏭️ What's next: More asset managers are expected to adjust fund labels or investment approaches to remain compliant
• Regulatory scrutiny will likely increase across other jurisdictions
• Investors may increasingly shift capital based on stricter and more meaningful ESG classifications

💬 One quote: “The sustainability characteristics of 60 funds with assets of US$92 billion were enhanced, including adoption of exclusions required for funds with sustainability-related words in their names.” – BlackRock letter to investors

📈 One stat: BlackRock is modifying 135 funds in response to ESMA rules, impacting over US$185 billion in assets under management

See here detailed sustainability performance of companies like BNP Paribas and AXA 

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