On 14 May 2024, ESMA published its final guidelines on funds’ names using ESG or sustainability-related terms (the Guidelines).
As a result, the use of certain environmental, social and governance (ESG) or sustainability-related terms will trigger minimum requirements based on (i) quantitative thresholds (80%), (ii) exclusion criteria (PAB and CTB exclusions) and (iii) additional qualitative criteria for some ESG or sustainability-related terms.
The Guidelines aim at preventing greenwashing and ensuring that investors are not misled by fund names that suggest a focus on ESG investments or sustainability objectives until the next review of SFDR. Greenwashing has been a growing concern, and the Guidelines are presented as a step towards mitigating this risk.
Please see full publication below for more information.
