EU funds face pressure to dump US stocks

Regulatory control: The EU headquarters in Brussels. The United States could see the most impact in terms of stock market value under new rules governing ESG requirements.— AP

COPENHAGEN: The US stock market has emerged as the most exposed to divestment after the European Union (EU) unveiled new rules limiting how freely asset managers can attach environmental, social and governance (ESG) labels to their funds.

The European Securities and Markets Authority (ESMA) said last month that investment funds with ESG labels or equivalent terms will need to have at least 80% of their assets under management in something that’s actually related to environmental, social or governance goals. They also can’t invest in certain assets such as the largest oil and gas producers.