Index provider MSCI is set to crack down on ETFs with environmental, social, and governance (ESG) ratings from hundreds of funds, with thousands more likely to face downgrades. Index providers are establishing stricter guidelines for ESG-compliant funds. As the sustainable finance industry continues to grow, concerns about "greenwashing" mount, and index providers are making changes to their ESG rating systems. The outcome of MSCI's consultation on its ESG ratings is still awaited, but a note from BlackRock's iShares suggests that significant changes are expected. According to the note, the number of European ETFs with a triple-A ESG rating from MSCI is likely to decline from 1,120 to just 54, while the number of unrated funds will jump from 24 to 462.