Eurosif response to the ESMA consultation on guidelines for the use of ESG or sustainability-related terms in funds’ names

21 February 2023

Eurosif supports the idea of introducing minimum sustainability criteria for the different product categories to guarantee that sustainability-related claims and commitments are in line with the reasonable expectations investors can have. However, this should happen alongside a review of the SFRD framework aiming for:

• a clearer delineation between product categories so that FMPs can classify their investment
products appropriately and in a manner that clearly conveys the characteristics of the product;

• clarity of rules including key concepts and definitions;

• better reflecting specificities of impact/transition investments;

• improving the Do No Significant Harm provisions and reflecting on whether a consideration of the Principle Adverse Impact indicators is appropriate to that end;

• addressing any other issues identified during the first years of the implementation.

We recommend properly considering whether to keep SFRD as a disclosure framework and complement it with product labels with different levels of ambition or whether to turn SFDR into a fully-fledged standard by setting the minimum performance criteria for each of the product categories.

In the meantime, we suggest providing as much clarity as possible with regards to the existing SFDR provisions (including on what can be considered as ESG characteristics) in the long-awaited Q&As from the European Commission.

Contact details:

Aleksandra Palinska, Executive Director –