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This document is designed for Asset Managers navigating the evolving regulatory landscape of ESG and sustainability-related fund naming in the EU market. Here, you will find a summary of the key requirements introduced by the ESMA Guidelines on Funds’ Naming, along with practical insights to help ensure compliance, as the new rules took effect in November 2024 for new funds and will apply to existing ones from May 2025.
In Q2 2024, ESMA finalized its guidelines, setting strict thresholds for the use of ESG-related terms in fund names to enhance transparency and prevent greenwashing. Among the main requirements, funds must allocate at least 80% of their investments toward sustainability-related objectives if they use ESG or impact-related terms. Additionally, funds must exclude companies identified under Article 12 of the Benchmark Regulation, aligning with the principles of Paris-Aligned and Climate Transition Benchmarks. Understanding and implementing these requirements can be challenging, which is why Datia has compiled this guide to simplify the transition for financial market participants.
We hope this guide gives you the clarity needed to align your fund naming with the ESMA Guidelines and avoid misleading claims. The information presented here is based on the regulation, and we encourage you to start assessing your compliance strategy early. If you have any questions or need further assistance, feel free to reach out to us at hello@datia.app.
