ESMA publishes two new thematic notes on sustainability-related claims

The European Securities and Markets Authority (ESMA) has published two thematic notes on sustainability-related claims, one on impact claims and one on climate transition claims. The notes set out practical examples of good and poor practice to help firms comply with the principle that sustainability-related communications should be clear, fair and not misleading, and so help to reduce the risk of greenwashing. On impact claims, the note examines positive impact claims made through funds and bonds. ESMA notes that market participants may have different understandings of, and levels of ambition for claims of positive environmental or social impact. ESMA therefore encourages firms making such claims to explain clearly what difference they expect to make, how they aim to achieve positive impact and how they will measure the results, so that investors receive clear and balanced information. On climate transition claims, the note draws on market practices observed across funds, bonds and benchmarks. It states that such claims are often forward-looking and subject to uncertainty as their achievement may depend on future actions, assumptions and external factors. Accordingly, it stresses the importance of firms clearly communicating their transition ambition, how it is expected to be implemented, and how progress will be assessed and reported, including any relevant assumptions, data limitations and dependencies. Both notes follow ESMA's previous thematic notes on ESG credentials and ESG strategies.

Return to main website.