ALFI responds to ESMA consultation regarding Guidelines on funds’ names using ESG or sustainability-related terms

In the course of this consultation, ESMA was particularly seeking stakeholders’ feedback on the introduction of quantitative thresholds for the minimum proportion of investments sufficient to support the ESG or sustainability-related terms in funds’ names.

In its response, ALFI agrees that it is of utmost importance to protect investors against unsubstantiated or exaggerated sustainability claims and to have harmonized requirements to achieve this goal. However, ALFI also articulated some concerns regarding the approach suggested by ESMA, in particular regarding the underlying terminology, the way to construct the threshold mechanism, the timing and the scope of the proposed guidelines. ALFI proposed as an alternative solution to focus on requiring clear demonstration of the underlying methodologies and the binding elements of the fund’s investment strategy.

View the ALFI response.