ESMA promotes clarity in claims on impact and transition

Impact claims

This thematic note examines positive impact claims made through funds and bonds. Market participants understand positive environmental or social impact differently and attach different levels of ambition to their impact claims. Therefore, they are encouraged to explain clearly what difference they expect to make, how they aim to generate positive impact and how they will measure results, so that investors receive clear and balanced information.

Climate transition claims

Focusing on climate transition claims, the second note draws on observed market practices across funds, bonds and benchmarks. Such claims are often forward-looking and subject to uncertainty, as their achievement may depend on future actions, assumptions and external factors. The note highlights the importance of clearly communicating what the transition ambition is, how it is expected to be implemented and how progress will be assessed and communicated, including relevant assumptions, data limitations and dependencies.

Thematic notes offer practical do’s and don’ts for making sustainability claims in non-regulatory communications, illustrated through concrete examples of good and poor practices that are based on observed market practices. They aim to ensure communications are clear, fair and not misleading and hence reducing the risk of greenwashing.

Background

Today’s publications are part of ESMA’s wider series aimed at promoting greater transparency and consistency in sustainability-related disclosures. It follows previous thematic notes on ESG credentials and ESG strategies.

The thematic notes do not create new regulatory requirements and should not be understood as prescribing a particular approach or level of ambition, for example in the context of the ongoing review of the Sustainable Finance Disclosure Regulation (SFDR). Instead, the notes provide observations and examples intended to support market participants’ understanding of the existing expectations under the principle of clear, fair and not misleading communication.

Further information:

Cristina Bonillo Olivares

Senior Communications Officer
press@esma.europa.eu