On May 14, the European Securities and Markets Authority (ESMA) published new guidelines on the use of ESG or sustainability-related terms in fund names. These guidelines aim to reduce greenwashing through unwarranted use of sustainability terms. A fund’s name is the first thing investors see, making it a powerful marketing tool. Investors who choose a sustainable strategy should expect that funds with these terms in the name actually meet certain standards. Whether these new guidelines ensure that, however, remains to be seen. Using the open standards of the Sustainable Finance Disclosure Regulation (SFDR) within these guidelines will not eliminate the uncertainty around sustainable terms used. The full article is only available in Dutch.
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