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The investment unit of Deutsche Bank AG will have to divest more than 5% of holdings in some ESG funds in response to new European Union rules set to be implemented this year.
The European Securities and Markets Authority will start enforcing new requirements in the coming months, targeting funds that reference ESG, sustainability, transition and impact in their names to ensure those terms really reflect what the portfolio holds. Though not yet finalized, the rules are already forcing asset managers to review portfolio holdings and make any necessary adjustments.
“The biggest impact that we currently observe for an existing strategy through the new binding elements in ESG-labeled funds is more than 5% of the investment universe,” Dennis Haensel, head of ESG advisory at DWS Group, said in an interview. He declined to name the specific funds that will be affected, but said that DWS is getting in touch with portfolio managers and clients regarding the adjustments...
more at Bloomberg