Regulatory Alerts2024-05-14
Final Report on Guidelines on funds’ names using ESG or sustainability-related terms
ESMA issued final guidelines to mitigate greenwashing risks by regulating the use of ESG and sustainability-related terminology in UCITS and AIF fund names. The rules mandate that funds using such terms must allocate at least 80% of investments to meet specific environmental, social, or sustainability objectives, while applying exclusion criteria based on Paris-aligned or Climate Transition Benchmarks depending on the term category. These guidelines, derived from updated AIFMD and UCITS Directive mandates, introduce specific provisions for transition and impact terms and apply to existing funds following a transitional compliance period.
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