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  • 1.  ESMA - Final guidelines on fund names

    Posted 23-05-2024 16:17

    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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  • 2.  RE: ESMA - Final guidelines on fund names

    Posted 24-05-2024 09:29
      |   view attached

    thanks Francesca,
    fyi  - good summary by Simmons & Simmons on their insights page here ESG: ESMA Guidelines on fund names published | Simmons & Simmons (simmons-simmons.com)  and
    accompanying top 10 talking points doc (attached).
    Assumes an implementation date 15 March 2025 for existing funds,
    regards
    James



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    James Doyle
    Director, Green Finance, Investment Management
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  • 3.  RE: ESMA - Final guidelines on fund names

    Posted 06-06-2024 14:52

    Thanks James. A super insightful document.

    I have a question for you / the wider community on point (g) companies that derive 50% or more of their revenues from electricity generation with a GHG intensity of more than 100 g CO2 e/kWh.

    I am looking at companies in the universe that produce electricity from wind power (i.e., it is >50% of revenues) when combined with other renewables. In turn, the CO2e/kWh is >100g. 

    Surely this exclusion criterion is excluding GOOD 'Sustainable' companies?

    Am I missing something? Is there another way of calculating for this exclusion?



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    Francesca Wheble
    Responsible Investment Lead
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