(Bloomberg) -- The asset management units of Deutsche Bank AG and BNP Paribas SA are adding to a tidal wave of ESG fund downgrades, bringing industry assets under management to have been hit by such reclassifications to well over $100 billion.

BNP said it was stripping Europe’s top ESG designation from $16 billion worth of funds, while DWS Group’s reclassification will hit eight funds holding about $265 million, after announcing $2.1 billion in downgrades last week. The industry has blamed unclear rules for the chaos, as investors start to voice their anger.

The DWS and BNP cuts are the latest in a string of ESG fund downgrades that have ensnared investing giants including BlackRock Inc. and Pacific Investment Management Co. Amundi SA revealed last week it will reclassify almost all its $46 billion in so-called Article 9 funds, as the EU’s highest ESG designation is known. In all cases, the decisions were triggered by fresh guidance from the EU Commission on how to interpret the bloc’s regulations. 

The development has alarmed onlookers, with the head of Europe’s main retail investor organization now planning to meet with regulators and legislators to convey concerns that members are being exposed to greenwashing.

“We need to have much clearer guidance from the authorities to make sure we aren’t misled and we aren’t being sold greenwashed investment products,” Guillaume Prache, managing director of Better Finance, said in an interview. 

The group, which represents roughly 4 million financial services users across 25 countries, has scheduled meetings with the European Commission and the European Securities and Markets Authority, he said.

“Asset managers will have to explain to their clients that they’re operating in an uncertain and rapidly evolving regulatory environment,” said Hortense Bioy, Morningstar Inc.’s global director of sustainability research. “Let’s be clear, the EU has set a very ambitious, but also extremely complex, disclosure regime.”

Morningstar has estimated that hundreds of funds may need to be downgraded before the dust settles. That’s as EU guidance that Article 9 funds must hold 100% sustainable investments, save for hedging and liquidity requirements, wrong-foots much of the asset management industry.

“The situation is a bit chaotic at the moment,” Bioy said. The market researcher estimates that less than 5% of Article 9 funds currently live up to the EU’s 100% sustainability requirement.

Yet some asset managers are holding off with reclassifications, often on the advice of lawyers, in the hope that further guidance from EU authorities will allow them to keep current designations. That’s as the Commission looks into a request from Europe’s markets watchdog, ESMA, to clarify what it means by a “sustainable investment.” The Commission has said it’s aware of the issue and is working on the case.

“There is an urgent need for the regulator to not only clarify what qualifies and what doesn’t qualify as a sustainability investment but also what methodologies are acceptable to calculate portfolio exposure to sustainable investments,” Bioy said. 

BNP is downgrading 26 so-called Article 9 funds. Of those, 24 are index funds, it said in an email to Bloomberg on Friday. The majority of its actively managed Article 9 funds, equivalent to about $20 billion, will be unaffected, BNP said. 

The current lack of clarity has the potential to damage the reputation of Europe’s ESG rulebook, the Sustainable Finance Disclosure Regulation, Bioy said. 

“The credibility of SFDR and the whole asset management industry is at stake here,” she said. “We can’t ignore the fact that some investors have invested in these Article 9 funds thinking they were dark green strategies. Even if these strategies haven’t changed and the portfolios remain the same, the perception of the ‘greenness’ of these strategies will change.”

European pension managers are also voicing concerns. Because there’s no current guidance on how to interpret what should go into a sustainable investment, “there is a serious risk of diverging implementation practices and a lack of comparability between products and reporting,” said Anastasios Pavlos, policy adviser at Pensions Europe, whose members oversee a combined $7 trillion in assets.

For now, it’s too early to say whether pension managers will need to adjust allocations in response to the reclassifications, he said.

Prache of Better Finance said he also wants to talk to European authorities about their ostensible failure to produce a regulatory framework that retail investors can understand. 

“There is a provision in EU rules that says that investor information must be intelligible to the majority of the people to whom it is addressed,” he said. But SFDR is “an area -- and it’s unfortunately not the only one -- where this law is not complied with.”

(updates full tally of downgrades in the lead)

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