The European Securities and Markets Authority has published the official translations of its guidelines on funds' names using ESG or sustainability-related terms. The objective of the guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide asset managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names.

The guidelines establish that to be able to use these terms, a minimum threshold of 80 percent of investments should be used to meet environmental, social characteristics or sustainable investment objectives. The guidelines will start applying on November 21, 2024. The transitional period for funds existing before the application date is six months after that date, on May 21, 2025. Any new funds created on or after the application date are expected to apply the guidelines immediately.

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