Accrona’s Post

FYI below from the CSSF, incorporating ESMA’s Guidelines on funds’ names using ESG or sustainability-related terms. All market participants are expected to carry out a self-assessment in relation to the applicability of the Guidelines, regardless of the Article of SFDR that they disclose under. Sponsors of authorised AIFs and UCITS should note the “priority processing procedure” (PPP) with a pro forma confirmation letter where they wish to change the name of a fund or sub-fund. In particular, it’s worth noting that, where you intend to change the name of your fund, the IFM must make certain confirmations including that the minor change has “no negative impact on the investor’s expectation as regards to return and/or ESG engagement”. Furthermore, a rather odd confirmation that goes beyond the “fair, clear and not misleading” test: disclosures are also required to be simple and concise.

ESG or sustainability-related terms 📢 Communication to the investment fund industry in relation to the ESMA Guidelines on funds’ names using ESG or sustainability-related terms 👉 https://lnkd.in/ebB9wsmf 📃 Circular CSSF 24/863 - Guidelines on funds’ names using ESG or sustainability-related terms 👉 https://lnkd.in/ejEZUdsh #cssf #esg #sustainability #investmentfunds

🔔 New Updates from the CSSF Circular 24/863 - Guidelines on Fund Names using ESG or sustainability-related terms   ✔️ CSSF Integration of Guidelines into Luxembourg Regulatory Framework ✔️ Guidelines Application Date as from 21/November 2024 Expectations from Market Participants 📍 Ensure Compliance of Fund Names with Guidelines 📍 Avoid misleading Fund Names 📍 Adequate Disclosure in precontractual documentation of elements supporting the use of ESG or sustainability-related terms in fund's name   💡 CSSF is granting a Priority Processing Procedure ("PPP") to existing UCITS and AIFs that limit the update of their issuing document/prospectus to amendments required in the context of the entry into force of the Guidelines via the Fund Naming Confirmation Letter.

The EU is strengthening its regulations on how financial institutions consider environmental, social, and governance (ESG) factors in their investments, requiring firms to disclose: 🔸 How they integrate sustainability risks into their decision-making processes. 🔸 The potential negative impacts of their investments on the environment and society. 🔸 These regulations aim to increase transparency and prevent greenwashing, ultimately helping investors make informed decisions about sustainable investing. Learn more about the ESG and how it impacts your investment options: https://bit.ly/49AOsKh

EU markets regulator the European Securities and Markets Authority (ESMA) announced the release of its finalized guidelines for the use of ESG and sustainability-related terms in investment fund names, including investment thresholds required for sustainable investment funds, and the establishment of a transition category for investments that are not yet green, but are on a positive trajectory towards achieving environmental sustainability goals. According to ESMA, the new guidelines were established as investor demand for ESG-focused funds has increased sharply, creating incentives for asset managers to include sustainability-related terms in fund names to attract investors, leading to an increased risk of greenwashing. In a recent study released by ESMA, the regulator found that there has been a sharp increase in the use of sustainability-related terms in fund names in Europe over the past several years, with the proportion of funds using ESG terms up more than 4x in 10 years, as fund managers launched new ESG-related products, and changed the names of funds to incorporate sustainability-related terms. The study also found a preference by fund providers for more generic ESG terms, which could make it difficult for investors to verify that investments align with the funds’ names. https://lnkd.in/e9FZn2Rk #eu #sustainability #esg #esma #greenwash #zerobees

Luxembourg's CSSF has now provided guidance on the use ESG terms in fund names. Similar to the SEC's Investment Company Act names rule, ESG funds need to invest at least 80% of their assets in investments aligned with their ESG or sustainability objectives. Unlike the SEC, however, with SFDR Article 2(17), EU regulators have further defined what counts as a sustainable asset. This is part of a broader trend towards regulatory fragmentation: it's complicated (and sometimes impossible) to run the same ESG strategy in different jurisdictions.

ESMA has published the translations of the Guidelines on funds' names using ESG or sustainability-related terms, meaning we now have clarity on the application date - 21 November 2024. Existing funds will have to comply by 21 May 2025. Read more about ESMA's fund naming guidelines here - https://lnkd.in/eMar-dsT

🍃 EU against greenwashing in funds using #ESG or #Sustainability names ESMA has released finalized guidelines for using ESG and sustainability-related fund names. The goal is to protect investors from false or exaggerated sustainability claims in fund names and to give asset managers clear rules for using ESG or sustainability-related terms in their fund names. Key points: ➡️ Investment thresholds Funds must have at least 80% of investments supporting ESG or sustainability characteristics. ➡️ Transition category A new category for funds aiming to improve their environmental impact, with terms like “improving” and “progress.” ➡️ Exclusions Criteria based on EU rules, ensuring funds avoid misleading claims. Background: ➡️ Investor demand Rising interest in ESG funds has increased the risk of greenwashing. ➡️ Consultation feedback Investors called for clear, consistent rules and recognition of transition efforts. Implementation: ➡️ Guidelines take effect three months after publication on the ESMA website. These guidelines will help ensure that ESG and sustainability-labeled funds genuinely reflect their investment strategies, promoting trust and transparency in the market. #Finance #Investment #GreenFinance #SustainableInvesting #ESG

« The European Securities and Markets Authority (#ESMA) has finalized guidelines aimed at curbing #greenwashing in the investment sector. These new rules are designed to protect investors from misleading claims about the #sustainability of funds and provide clear criteria for asset managers. Main points are: 1. New guidelines mandate at least 80% of investments in #ESG or #sustainability funds must meet specific environmental, social, or governance criteria. 2. Exclusion criteria are specified for various sustainability-related terms to prevent misleading fund names. 3. Guidelines to take effect three months after publication in all EU languages, with a six-month transitional period for existing funds.  » Koen De Loose Julien Thiry Michiel Dobbelaere

❗️ESG Update: ESMA has published its report containing Guidelines on funds’ names using #ESG or sustainability-related terms. 💫 In a nutshell: to be able to use ESG or sustainability-related terms, a minimum threshold of 80% of investments should be used to meet environmental, social characteristics or sustainable investment objectives. ✨Objectives: 1) ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names; 2) provide asset managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names; 🌟Timeline: The Guidelines will be translated into all EU languages and published on ESMA’s website; they will start applying 3 months after that publication.