Seeking clarity in rules for retail ESG funds

THE rules around the labelling of funds as ESG (environment, social and governance) and/or sustainable are only recently gaining clarity. In Europe in particular, they are causing a shake-out among asset managers, who are braced for the possibility that some or many of their funds may need to be downgraded.

Regulators in Asia – including Singapore, Hong Kong and Japan – have begun to tighten ESG funds’ disclosure requirements. The Monetary Authority of Singapore’s (MAS) disclosure guidelines for retail ESG funds were issued in July and will take effect in January 2023.

In Japan, no new fund has claimed the ESG label in the past five months since the Financial Services Agency signalled new regulations on ESG-labelled funds, according to Bloomberg reports.