ESMA publishes thematic note on clear, fair and not misleading sustainability-related claims

The European Securities and Markets Authority (ESMA) has issued a thematic note to assist firms when making sustainability claims to ensure that they are clear, fair and not misleading. The aim of the thematic note is to provide market participants with information and build on observed market practices. The note focuses on environmental, social and governance (ESG) credentials and outlines four guiding principles on making sustainability claims: (i) accurate—sustainability claims should fairly and accurately represent the entity's sustainability profile without exaggeration and avoiding falsehoods, omissions and cherry-picking; (ii) accessible—sustainability claims should be based on information that is easy to access and understand, with the appropriate level of detail and clarity, avoiding oversimplification; (iii) substantiated—sustainability claims should be backed by clear, credible reasoning, facts and processes, with transparent methodologies and limitations; and (iv) up to date—sustainability claims should be up to date with any material changes disclosed promptly, including a clear indication of the analysis' date and perimeter.

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