Funds touted as having higher sustainability credentials — or 'dark green' funds — risk becoming obsolete if the European Commission and regulator continue tightening ESG rules, the chief executive of a €27bn impact specialist fund group has warned.

Under the Sustainable Finance Disclosure Regulation, funds designated in the 'dark green' Article 9 category must meet stricter requirements than their 'light green' Article 8 counterparts. This includes having sustainable goals as part of their objective and ensuring they "do no significant harm".