Blog: German Regulator Shelves ESG Rules After Russia Energy Fears – Financial Post

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(Bloomberg) — Germany’s financial regulator is indefinitely postponing the introduction of planned rules for classifying funds as being sustainable investments, as Russia’s invasion of Ukraine sends shockwaves through global energy markets.

“The environment isn’t stable enough for permanent regulation,” said BaFin President Mark Branson. “Fund managers can of course still set up and market sustainable investments. We will use some of the principles in practice that we consulted on.”

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The investment industry’s historic pivot to funds that focus on support the fight against climate change and social injustice has run into the disruption of the war forcing governments to rethink their energy security.

In a speech to reporters in Frankfurt on Tuesday, Branson cited the need for ESG funds to be 75% invested in sustainable assets as a principle that it would carry over from its planned directive. “Through these stricter practices we will protect investors from greenwashing,” he said.

Read More: Germany’s Tough Green-Washing Stance Could Shape EU Fund Rules

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