“Investors With $6.8 Trillion Warn EU Not to Bow to ESG Backlash”

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A group of investors representing €6.6 trillion ($6.8 trillion) of assets is calling on European officials not to cave in to mounting pressure to scale back the bloc’s ESG regulations.

The planned reporting rules are essential to help asset managers and owners identify where to allocate funds, according to the group, which consists of the Institutional Investors Group on Climate Change (IIGCC), the European Sustainable Investment Forum (Eurosif) and the Principles for Responsible Investment (PRI).

Any adjustments should be limited to technical standards and guidance on implementation, the group said on Tuesday. The alternative, namely reopening European environmental, social and governance requirements “in their entirety, risks creating regulatory uncertainty and could ultimately jeopardize” Europe’s goal of living up to its Green Deal…the joint statement said.

The warning coincides with mounting pressure from Germany and France, the European Union’s two largest economies, to scale back planned ESG regulations …

The EU has included a number of ESG regulations in its so-called omnibus process, which is expected to take place at the end of this month…

Alexander Burr, ESG policy lead at Legal and General Investment Management, said that rolling back the rules “could risk our ability to understand ESG or sustainability-related risks.”…