ESMA Guides on Sustainability Risks & Disclosures of Investment Funds
The European Securities and Markets Authority (ESMA) published a supervisory briefing on convergence on supervision of investment funds with sustainability features as well as to aid combating of greenwashing by investment funds.
The briefing provides guidance to national competent authorities on the supervision of sustainability-related disclosures and integration of sustainability risks. The focus is on a risk-based approach to supervision, wherein the intensity and frequency of the sustainability-related supervision of investment funds are determined based on the assessment of the risks affecting these funds. The briefing does not constitute new policy; however, the content has been designed to fit with supervisor methodologies and may be updated to reflect future regulatory developments or supervisory experiences. The briefing presents
- guiding principles on the use of sustainability-related terms in funds’ name.
- guidance for the supervision of fund documentation and marketing material.
- guidance for convergent supervision of the integration of sustainability risks by alternative investment fund managers (AIFMs) and undertakings for the collective investment in transferable securities managers (UCITS).
ESMA aims to work closely with the national competent authorities to combat greenwashing and plans to update the supervisory briefing, if needed, after the regulatory technical standards on Sustainable Finance Disclosure Regulation (SFDR) comes into effect on January 01, 2023.
Keywords: Europe, EU, Banking, Securities, ESG, Sustainability-Related Disclosures, Investment Funds, Sustainable Finance, SFDR, UCITS, Greenwashing, Sustainable Taxonomy, ESMA
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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