SRI: an insight on the evolution of its definition and a focus on the European ESG Regulation

In recent years the Sustainable Responsible Investment (SRI) has become an important part of the International Asset Management Capital Market by incorporating ESG factors into its investment selection and management processes and in its investment decisions too. This chapter wants to analyse, through a literature review, the evolution in the definition of SRI - from “Ethical Finance” to “Socially” and “Sustainable Responsible Investment” – pointing out the principle characters of this approach to financial investment in which the research, analysis and selection of investments takes place not only on the basis of traditional economic-financial considerations, but also on the basis of environmental, social and corporate governance criteria, known also as ESG criteria. Then the author studies how this concept has been drafted in the recent European ESG Regulatory Framework, considering the definition of “sustainable investments” indicated in recent EU regulations, such as the EU Taxonomy (Reg. 852/2020) - which realizes the Action N.1 of the EC Action Plan on Financing Sustainable Growth, issued in March 2018 - and the Sustainable Finance Disclosure Regulation (SFDR)(Reg. 2088/2019), having both the aim to increase the disclosure and the to the EU Green Deal and the Next Generation EU are changing the existing financial contest into a more sustainable one. The analysis will show also the necessity of some adjusting measures to a complete alignment between the various definitions given in relation to the concept of “sustainable investment” in the EU regulations considered, to help MPIs in tackling greenwashing. Some final consideration will conclude the work, indicating also some elements for further research.