N※N

EU watchdog frees green bonds from fund naming rules

The European Union's financial watchdog, the European Securities and Markets Authority (ESMA), has decided not to impose specific rules on how funds can use environmental, social, and governance (ESG) or sustainability-related terms in their names. This decision was made despite calls from some investors for stricter regulations to prevent misleading marketing practices known as "greenwashing." ESMA's final guidelines, published on December 16, 2024, focus instead on ensuring that funds' investment strategies align with their stated sustainability objectives. The guidelines encourage transparency and clarity in how funds describe their sustainability focus, but they do not mandate the use of terms like "green" or "sustainable" in fund names. This approach aims to give fund managers flexibility while still promoting genuine sustainability efforts. However, ESMA has indicated that it might revisit the issue if greenwashing concerns persist.

Read the Full Reuters Article at:
[ https://www.reuters.com/sustainability/sustainable-finance-reporting/eu-watchdog-frees-green-bonds-fund-naming-rules-2024-12-16/ ]