A MainStreet Partners report shows that 23% of all Article 8 funds remain at risk of greenwashing compared with just 3% for Article 9 funds.

The 2025 ESG and Sustainable Barometer report, which analyses over 9,500 investment strategies managed by more than 460 asset managers in European and UK markets, shows that the proportion of Article 9 funds that have a greenwashing risk has reduced over time – now at 3%. It also found a clear downward trend in asset manager ratings across each Sustainable Finance Disclosure Regulation (SFDR) classification and non-EU ratings.

Neill Blanks, Managing Director at MainStreet, said, “At the start of 2024, you may have been forgiven for thinking we would see less regulatory complexity than in the past three years. Unfortunately, that was far from the case, not least as fund naming rules came into effect on both sides of the Atlantic. Regulatory scrutiny continues to intensify, with the threat of fines being imposed for those that do not adapt, on top of the associated reputational damage.
As markets continue to adapt to new frameworks, we expect to see a broader range of ESG and Sustainable investment products. These products will have clear and specific key performance indicators linked to the fund’s ESG and Sustainable approach, allowing investors to better understand the intentions of the strategy, and most importantly help reduce the risk of greenwashing. With clear regulatory expectations and evolving industry best practices, investors should have more confidence in the integrity of Sustainable investment.”

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