Hi all,
Please see below a summary of the ESMA final guidelines.
•In-Scope Funds must comply with:
•Application of "80% threshold" rule
•Compliance with the exclusion criteria applicable to either EU Paris-Aligned Benchmarks (PAB Exclusion Criteria) or EU Climate Transition Benchmarks (CTB Exclusion Criteria).
•Funds using the term "sustainable" or a derivative of must also "invest meaningfully" in sustainable investments within the meaning of the SFDR.
•Criteria (for "Sustainable" labelled funds)
•80% Threshold
•PAB Exclusion Criteria
•The fund must "invest meaningfully" in sustainable investments within the meaning of the SFDR.
•PAB Exclusion Criteria (prohibited to invest in the following):
•Companies involved in any activities related to controversial weapons
•Companies involved in the cultivation and production of tobacco
•Companies that benchmark administrators find in violation of the UNGC principles, or the OECD Guidelines for Multinational Enterprises
•Companies that derive 10% or more from their revenues from the exploration, extraction, distribution or refining of oil fuels
•Companies that derive 50% or more of their revenues from the exploration, extraction, manufacturing or distribution of gaseous fuels
•Companies that derive 50% or more of their revenues from electricity generation with a GHG intensity of more than 100g CO2e/kWh.
Assuming it takes 1 month for translation of the Guidelines, it is believed this could apply to newly created In-Scope Funds from 15 September 2024 onwards and will apply to existing In-Scope Funds from 15 March 2025 (if we take publication date of 15 June 2024.)
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Francesca Wheble
Responsible Investment Analyst
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