Regulatory Alerts2024-05-16
Guidance on ESG Funds and Model Portfolios in ADGM
The Abu Dhabi Global Market Financial Services Regulatory Authority issued this guidance to clarify expectations for the management and marketing of ESG Investment Vehicles and mitigate greenwashing risks. The document mandates that funds and model portfolios must accurately reflect their ESG strategies in names and disclosures, prohibiting the use of broad labels like 'ESG' unless all three environmental, social, and governance components are covered. It further requires clear specification of investment strategies, adoption of credible taxonomies, and rigorous reporting on impact metrics and stewardship activities to ensure transparency and prevent category errors.
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