The EU’s Article 9 classification for sustainable investments may be under threat after a backlash from asset managers.

According to the FT, asset managers have complained that the new EU classification rules are not workable which may lead to the European Commission to abandon them.

Some leading asset managers such as BNP Paribas, BlackRock, Amundi and Pictet have removed the label from some of their funds in the past 3 months. This has led to pressure on the commission from Esma, the EU’s securities regulator, after claims of a lack of official guidance about using the ESG labels for funds.

The re-labelling of  ESG funds by asset managers has led to confusion as the EU has reportedly been relucent to strictly define what is sustainable. There is also a fear of fund mis-selling accusations and calls for minimum standards to be clarified. The commission clarified its rules in January to require the greenest funds to hold 100 per cent sustainable investments.

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