How Green is ‘Dark Green’? An Analysis of SFDR Article 9 Funds

59 Pages Posted: 28 Feb 2023

See all articles by Adrien-Paul Lambillon

Adrien-Paul Lambillon

University of Zurich - Department of Finance

Marc Chesney

University of Zurich - Department of Banking and Finance

Date Written: February 22, 2023


We examine the inclusion of companies into so-called ‘dark green’ funds categorized as Article 9 under the European Sustainable Finance Disclosure Regulation (SFDR). While these funds should conceptually go beyond screening and ESG integration approaches and invest only in ‘sustainable investments’, our findings raise questions on fund managers’ definition of ‘sustainable investments’. Our dataset consists of 290 public equity SFDR Article 9 funds and a resulting set of 4’463 global stocks. We develop a metric of a company’s implied ‘greenness’ based on the frequency it is included in our fund sample and analyze the factors driving this greenness score. Our results provide three main findings. Firstly, our results show that the greenness score is significantly driven by efforts to improve the corporate sustainability profile, such as science-based net zero targets or human rights policies, as well as higher ESG ratings, while violations of the UN Global Compact principles or OECD guidelines for multinational enterprises have no statistically significant effect on the greenness score. Secondly, we find differences between global and regional SFDR Article 9 funds regarding corporate sustainability coefficients and sector exposure, suggesting that regional funds’ consideration of double materiality might be more limited and the share of ‘sustainable investments’ lower. Regional SFDR Article 9 funds could therefore be more likely to be declassified. Thirdly, our analysis of declassified SFDR Article 9 funds supports this prediction and highlights that the greenness score is less driven by corporate sustainability efforts when excluding declassified funds. We claim that the implementation of SFDR Article 9 poses greenwashing risks, leaving observers with the criticism of "tout ça pour ça?".

Keywords: responsible investment, sustainable investment, green investment, SRI, ESG, impact investing, regulation, SFDR, greenwashing

Suggested Citation

Lambillon, Adrien-Paul and Chesney, Marc, How Green is ‘Dark Green’? An Analysis of SFDR Article 9 Funds (February 22, 2023). Available at SSRN: or

Adrien-Paul Lambillon (Contact Author)

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032

Marc Chesney

University of Zurich - Department of Banking and Finance ( email )

Rämistrasse 71
Zürich, CH-8006

HOME PAGE: http://

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