Laura Kovesi, the top prosecutor in Europe, has proposed the formation of a select group of highly qualified financial crime and fraud investigators.
According to French regulator research, there is minimal difference in exposure to fossil fuels between Article 8 and Article 6 bond funds in the French market.
Article 8 services should have a stronger focus on sustainability than Article 6 items, according to classifications introduced by the European Sustainable Financial Disclosure Regulation (SFDR) to assist prevent greenwashing.
Nevertheless, according to a research of 10,616 funds conducted by the Autorité des marchés financiers, this is not the case in the specific area of exposure to the fossil fuel industry in France (AMF).
At the end of 2021, the funds under consideration had a total asset under management of €1.9 trillion. The AMF notes, however, that the data is now two years old and that some of the funds have been reclassified.
The study sought to determine whether funds that claim to promote environmental or social qualities – or even those with a sustainable investing goal – are less exposed to coal or oil and gas than others. In terms of equity funds, the study appeared to confirm "increased exposure of Article 6 funds to the coal sector."
In the case of bond funds, however, the difference in exposure between Article 8 and Article 6 offerings was "at best insignificant and at worst frequently positive and significant".
According to the paper, the disparities are "seldom substantial" in the statistical sense, even when organisations' adherence to transition plans is considered.
“Therefore, the application of SFDR in its current state can create a gap between the expectations expressed by investors and the reality of practices, justifying the introduction of minimum criteria for financial products displaying ambitions in terms of sustainability.”
This is the most recent development in the ongoing attack on SFDR. Due to significant overlaps, the Securities Market and Stakeholder Group (SMSG) recommended Esma in January to reclassify the Article 8 and 9 designations. The European Fund and Asset Management Association then suggested that Esma postpone its impending ESG fund-naming guidance, which is based on SFDR classifications.
By fLEXI tEAM