ESMA Guidelines: How to Correctly Label Sustainable Investment Funds?

Background: 

As part of the EU Action Plan to redirect capital to sustainable investments, the Sustainable Finance Directive Regulation (SFDR) requires financial market participants to make ESG disclosures on the investment funds they manage. Under this regulation, the first step was for asset managers to inform whether their investment funds pertain to the so-called SFDR Articles: Article 6 for funds with no specific sustainable objective, Article 8 for funds with either social or environmental objectives, and Article 9 for funds where sustainability is the core objective. Hence, Article 9 represents the most advanced funds when it comes to sustainability.

However, after this first SFDR exercise, many funds disclosed as Article 9 have been downgraded, as the requirements for Article 9 funds are high and difficult to meet. Considering the current statistics, the number of Article 8 funds has indeed increased due to, among other reasons- these downgrades.

From this point, different questions have arisen, including how funds are named or labelled and how words like “sustainable” or “green” may sometimes mislead and increase greenwashing risks. Therefore, the ESMA (European Securities and Markets Authority) issued a consultation on a potential threshold system for labelling funds as sustainable. However, the latest Q&A by the EU Commission does not take reference to threshold labelling, and the requirement remains for financial market participants to disclose their methodologies for fund constructions.

Our session:

In light of this discussion and the latest announcements from the EU Commission, this online panel will discuss the threshold proposal by ESMA on fund labelling/naming and how the implementation and reporting would be expected. Join us for this enriching discussion with our speakers and subject matter experts:

• Dr. Antonios Koumbarakis, Director, Sustainability & Strategic Regulatory, PWC
• Rosa Sangiorgio, Head of Responsible Investment, Pictet Wealth Management
• Sasha Cisar, Head of SDG Research & Experts, radicant Bank

Schedule: June 1, 2023, from 6:30 pm to 7:30 pm

Platform: Zoom, please note that this webinar will be recorded

In collaboration with radicant Bank.