Clarity AI: Only 4% of “Sustainable” Investment Funds Would Automatically Comply with Requirements of US, UK and EU Regulatory Investment Fund Label and Naming Rules

Clarity AI, a leading sustainability tech platform, has released a report revealing that the majority of funds with the term “sustainable” in their name would need to be renamed or restructured to be sold across the US, UK, and EU markets. In the EU, Clarity AI analyzed the proposed amendment by the European Securities and Markets Authority (ESMA) on minimum thresholds for Article 8 funds that use ESG or sustainability-related terms in their names. The analysis found that only 20% of Article 8 funds with the term “sustainable” currently plan to make sustainable investments of over 50%, as required by the consultation, while 20% plan to make less than 10% sustainable investment. Clarity AI emphasizes the importance of strong regulatory alignment across borders to prevent confusion in the market and “greenwashing.”



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