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ARTICLE · 23 MAY 2024

ESMA Guidelines On Fund Names

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The European Securities and Markets Authority (ESMA) has published its final guidelines on fund names using ESG or sustainability-related terms (Guidelines).

United KingdomFinance and Banking
Tim Lewis
Tim Lewis
Phil Bartram
Phil Bartram
Michael Raymond
Michael Raymond
Danny Riding
Danny Riding
Samuel Brewer
Samuel Brewer
Henriika Hara
Henriika Hara
Simon Witney
Simon Witney
Nigel Barratt
Nigel Barratt
Katherine Foweather
Katherine Foweather
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The European Securities and Markets Authority (ESMA) has published its final guidelines on fund names using ESG or sustainability-related terms (Guidelines). The Guidelines are primarily motivated the ESMA's desire to combat greenwashing and are intended to specify the circumstances where the fund names using ESG or sustainability related terms are unfair, unclear or misleading.

The Guidelines apply to AIFMs, internally managed AIFs and UCITS management companies as well as managers of EuVECAs, EuSEFs, ELTIFs and money market funds.

1. Overview

Broadly, each category must meet separate recommendations in relation to (i) a minimum 80% threshold linked to the proportion of investments used to meet environmental or social characteristics or sustainable investment objectives, and (ii) the types of investments that must be actively excluded from the fund. There are some additional requirements in respect of specific types of funds.

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