The European Securities and Markets Authority (ESMA) has launched a consultation on the use of ESG and sustainability-related terms in fund names, in a bid to tackle greenwashing and protect investors.
The EU's financial markets regulator is seeking stakeholder feedback by February next year on the introduction of quantitative thresholds for the minimum proportion of investments needed to support the ESG or sustainability credentials in funds' names. The proposals include a quantitative threshold (80%) for the use of ESG related words and an additional threshold (50%) for the use of "sustainable" or any sustainability-related term only, as part of the 80% threshold. It also includes the application of minimum safeguards to all investments for funds using such terms and additional co...
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