Investment services and the risks of sustainable finance

Andrea Perrone and Andrea Cardani

Chapter 6 in Research Handbook on EU Securities Law, 2025, pp 177-197 from Edward Elgar Publishing

Abstract: In order to foster sustainable growth, the European Union asked for the contribution of capital markets by integrating financial regulation with new rules on sustainability. The chapter explores the main impacts of the new investment services regime, highlighting that the policy choice favouring sustainable investments reduces the traditional neutrality of this regime. However, sustainable financial instruments present specific risks, so the policy choice favouring ESG investments unintentionally exposes investors to higher risks. Because the protection granted by the current regulatory framework proves insufficient, the chapter identifies some possible solutions for considering the risks associated with sustainable financial instruments and ensuring adequate investor protection.

Keywords: Sustainable finance; ESG; Investment services; MiFID II; Financial regulation (search for similar items in EconPapers)
Date: 2025
ISBN: 9781800376038
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