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  • 1.  Report: ESG Names and claims in the EU fund industry from ESMA

    Posted 19-10-2023 09:20
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    Report: ESG Names and claims in the EU fund industry from ESMA 

    Finance plays a key role in supporting the transition to a more sustainable economy. To achieve this, investor confidence and trust in the accuracy of ESG disclosures is necessary. With this in mind, greenwashing has become a major concern for policymakers around the world. Focussing on EU investment funds, Esma constructs and exploits several unique datasets to examine the basis for these concerns.

    Using a dataset with historical information on 36,000 funds managing EUR 16 trillion of assets, Esma finds that funds increasingly use ESGrelated language in their names, and that investors consistently prefer funds with ESG words in their name.

    They then analyse the extent of ESG language across funds' regulatory documentation and marketing material, using a dataset of more than 100,000 documents available at the end of 2022. Esma finds evidence of the fund industry adapting its ESG communication depending on the type of document – regulated or unregulated. Their findings support recent efforts by policymakers to ensure that EU funds' names and disclosures accurately reflect their activities. 

    https://www.esma.europa.eu/sites/default/files/2023-10/ESMA50-524821

    What are you observing in this space? Share your thoughts



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    Aya Pariy
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  • 2.  RE: Report: ESG Names and claims in the EU fund industry from ESMA

    Posted 19-10-2023 09:59
    Morning Aya,


    I hope you are well

    Thank you for your message 

    In reply and for me, I think the SEC speak a lot of sense here regarding 80% of assets 

    Please see 

    Thank you very much for your time and consideration



    Best regards
    Christopher Wigley 




    Sent from my iPhone





  • 3.  RE: Report: ESG Names and claims in the EU fund industry from ESMA

    Posted 19-10-2023 12:11

    Thank you for sharing Christopher! Will check the link.

    Curious to hear other members' views too 



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    Aya Pariy
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    Original Message


  • 4.  RE: Report: ESG Names and claims in the EU fund industry from ESMA

    Posted 26-10-2023 10:45

    Chris thanks for posting the article and heartening to see Republicans and Democrats agreeing on something that might help.


    The last sentence but one of the article in the FT should be as pertinent as any regulatory effort to define what an investor gets from a fund name.


    "Mark Uyeda, another Republican commissioner, said he believed that most investors rely on advisers to select funds and that they look beyond the fund name."


    Anyone that really cares about the approach being used when investing needs to do due diligence.


    Does the name mean what I mean by those words?

    Does it apply to the whole of my investment?

    How aggressively does it apply?

    Is their evidence to support the claim?


    Transparency, disclosure and some third party monitoring of compliance with easy access to this set of information are foundational to assuring authenticity for fund labels.  




    Original Message


  • 5.  RE: Report: ESG Names and claims in the EU fund industry from ESMA

    Posted 27-10-2023 10:46
    Dear David,


    I hope you are well

    Thank you for your e-mail

    Yes - I agree. It is always important for investors to 'look under the bonnet' to do their own analysis

    How an 80% rule would work I believe may be as follows - taking Green Bonds as an example:

    1.    It is accepted in just about every financial centre around the world that a 'Green Bond' is as defined by ICMA Green Bond Principles - that is, it has to be consistent with the four pillars of the Principles

    2.    A Green Bond Fund would therefore need to state in their prospectus - in my experience, UCITS and US - not only what they agree as a Green Bond is but also that at all times the value of Green Bonds would not drop below 80%. Should the value of green Bonds drop below 80% then this would be a breach

    In my opinion, I think the SEC outline would work

    Thank you very much for your time and consideration and that you again for your e-mail



    Best regards
    Chris







    Original Message


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