European Union
ESMA has published its final report which establishes the criteria that funds must follow when including ESG or sustainability-related terms
On May 14, 2024, the European Securities and Markets Authority (ESMA) released its final report on the Guidelines on fund´s names using ESG or sustainability-related terms. These Guidelines establish the criteria that funds must follow when including ESG or sustainability-related terms in their names. The criteria vary depending on the specific term used and the sustainable investment characteristics or objectives that the fund aims to promote.
Key aspects
- ESMA has established new Guidelines applicable to funds that include sustainability-related terms or ESG terms in their names.
- Funds that use ESG or sustainable terms in their name must use at least 80% of its investments to meet sustainable investment objectives and exclude controversial sectors.
- New funds must comply by 21 November 2024 and existing funds have until 21 May 2025 to change their name if necessary.