Sustainable Finance and Market Integrity: Rethinking Market Manipulation in ESG-Driven Markets

The increasing financial relevance of environmental, social and governance (ESG) information has created new challenges for the integrity of financial markets. As sustainability-related information increasingly influences investment decisions and securities prices, questions arise as to when misleading or strategically exploited ESG information may become relevant to market manipulation. This thesis examines under what circumstances ESG-related information can become an object, instrument or transmission channel of market manipulation, and to what extent existing market-integrity frameworks can address such conduct. The approach combines comparative legal analysis of the European Union and United States regulatory frameworks with a qualitative examination of selected case studies. Particular attention is given to the financial materiality and price sensitivity of ESG information and the interaction between sustainability-related information and established forms of manipulative conduct. The analysis demonstrates that the growing relevance of ESG information does not necessarily require the recognition of a new and autonomous form of market manipulation. Instead, ESG-related information can operate within established manipulative mechanisms when it is financially relevant and capable of affecting the information on which investors rely. At the same time, the ESG dimension alone is insufficient to establish manipulation, making it essential to preserve clear boundaries between manipulative conduct and other forms of ESG-related misconduct. The thesis therefore proposes a coordinated approach to ESG market integrity, centred on greater interaction between existing disclosure, surveillance and enforcement mechanisms. By connecting information integrity, market surveillance, transmission-channel oversight and proportionate enforcement, this approach seeks to strengthen existing market-integrity safeguards while allowing them to adapt to the evolving role of sustainability information in financial markets.