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ESG Derivatives Draw Greenwash Warning From Markets Watchdog – Bloomberg

As some of the world’s biggest banks start experimenting with complex ESG derivatives, Europe’s markets regulator says it’s time to impose new rules to protect investors from greenwashing.

The European Securities and Markets Authority says it’s hard to verify the positive impact of derivatives sold under environmental, social and governance labels. The watchdog says standardized criteria should be met before firms can add ESG tags to products such as forwards, options and swaps.