ESMA Fund Naming Guidelines
The European Securities and Markets Authority (ESMA) Guidelines on funds’ names using ESG or sustainability-related terms (the “Guidelines”) establish a framework for the use of ESG or sustainability-related terms in the names of investment funds.
The Guidelines apply to Undertakings for Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs) whose names include ESG- or sustainability-related terms, such as “ESG”, “transition”, “social”, “governance”, “environmental”, “impact” or “sustainability”, as well as derivatives of those terms (for example, “transitioning”, “green”, “equality”, “controversies”, “impactful” or “sustainably”).
The Guidelines aim to ensure that a fund’s name accurately reflects its ESG or sustainability-related strategy and does not contain misleading or exaggerated claims. To avoid misleading investors, ESG and sustainability-related terms used in fund names must be supported in a material way by evidence of sustainability characteristics or objectives that are reflected fairly and consistently in the fund’s investment objectives and policy.
Fund managers must therefore assess whether any fund in their range has a name containing an ESG or sustainability-related term. Where this is the case, the fund’s sustainability-related strategy must comply with the following requirements:
- Funds using transition-, social- or governance-related terms must:
- meet an 80% threshold, meaning that at least 80% of investments must be used to meet the environmental or social characteristics, or sustainable-investment objective, promoted by the fund in accordance with the binding elements of its investment strategy disclosed pre-contractually under the SFDR; and
- apply the exclusions set out in the EU Climate Transition Benchmark (CTB)
- Funds using environmental- or impact-related terms must:
- meet the same 80% threshold; and
- apply the exclusions set out in the EU Paris-Aligned Benchmark (PAB) Regulation.
- Funds using sustainability-related terms, including “sustainable” and “sustainability”, must:
- meet the same 80% threshold;
- apply the PAB exclusions; and
- commit to investing meaningfully in sustainable investments within the meaning of Article 2(17) of the SFDR.
Where a fund name combines terms from different categories, the applicable requirements generally apply cumulatively. The exception is transition-related terms. When a transition-related term is combined with environmental, social, governance or impact-related terms, only the requirements for transition-related terms apply, so the CTB rather than the PAB exclusions are used. When a transition-related term is combined with a sustainability-related term, the requirements for sustainability-related terms apply.
Funds that do not use any ESG or sustainability-related term in their name are not subject to the specific asset-allocation thresholds or exclusion criteria. However, their marketing communications and disclosures must still be fair, clear and not misleading, and must accurately reflect the fund’s investment strategy and objectives.
Visit the Low Carbon Benchmark Regulation for more information
Visit the SFDR Regulation for more information
The objective of the Guidelines is to protect investors from unsubstantiated, exaggerated or misleading sustainability claims in fund names. They establish clear and measurable criteria to ensure that a fund’s ESG or sustainability-related strategy aligns with the term used in its name, thereby addressing greenwashing risks, promoting transparency and supporting informed investment decisions.
The Guidelines apply to UCITS management companies, including UCITS that have not designated a management company; AIFMs, including internally managed AIFs; and managers of EuVECAs, EuSEFs, ELTIFs and MMFs. They also apply to competent authorities.
Financial services firms within the scope of the Guidelines must ensure that fund names accurately reflect the funds’ ESG or sustainability-related characteristics and provide investors with clear, fair and reliable information.
In practice, this requires managers to:
- assess whether each fund or sub-fund using an ESG- or sustainability-related term in its name falls within the scope of the Guidelines;
- ensure that the fund’s investment strategy, portfolio composition, exclusions and disclosures support the term used in its name;
- comply with the applicable thresholds, including the requirement that at least 80% of investments be used to meet the environmental or social characteristics, or sustainable-investment objective, promoted in accordance with the binding elements of the investment strategy;
- align pre-contractual and periodic disclosures with the fund’s naming and investment approach; and
- amend the fund name, investment strategy or disclosures where these are no longer consistent.
For funds established before 21 November 2024, managers had a transitional period ending on 21 May 2025 to bring the funds into compliance. During that period, they were required to review and, where necessary, adjust the fund’s name, strategy, exclusions and relevant documentation.
For funds established on or after 21 November 2024, the Guidelines applied immediately.
Since 21 May 2025, all in-scope funds have been expected to comply on an ongoing basis. Managers should therefore monitor portfolio changes, disclosure updates and any proposed renaming to ensure continued alignment between the fund’s name, investment strategy and sustainability-related disclosures.
The SFDR introduces mandatory disclosure requirements for financial products with sustainability-related commitments. The ESMA Guidelines complement these requirements by setting minimum conditions for the use of ESG- or sustainability-related terms in fund names.
Funds using such terms must ensure that their sustainability-related methodology is aligned with the Guidelines and that the methodology is accurately described, and its results reported, in accordance with the SFDR disclosure requirements.
Visit the SFDR Regulation for more information.
On 21 October 2024, the Commission de Surveillance du Secteur Financier (CSSF) published Circular CSSF 24/863, confirming that it applies the ESMA Guidelines on funds’ names using ESG or sustainability-related terms and integrating them into its administrative practice and regulatory approach.
The CSSF expects market participants, irrespective of whether they disclose under Article 6, 8 or 9 SFDR, to carry out a self-assessment of the applicability of the Guidelines to the products they manage and to ensure that fund and sub-fund names comply with the Guidelines.
To facilitate the necessary updates to pre-contractual documentation, the CSSF introduced a priority processing procedure (PPP) for existing UCITS and AIFs whose prospectus or issuing-document amendments were limited to changes required by the entry into force of the Guidelines. Such amendments had to be limited either to a change of the name of at least one sub-fund or to minor adjustments to the fund’s or sub-fund’s ESG engagement or SFDR pre-contractual disclosures.
On 4 April 2025, the CSSF updated the fund-naming confirmation letter accompanying PPP filings. The letter requires the applicant to confirm that only changes directly related to the entry into force of the Guidelines have been included in the filing.
The Guidelines have applied to new funds since 21 November 2024 and to existing funds since 21 May 2025. The PPP was therefore primarily a transitional measure; going forward, naming related changes will generally be assessed under the CSSF’s ordinary requirements for prospectus amendments, including its materiality guidance.
- 14 May 2024: ESMA published its final report on the Guidelines.
- 21 August 2024: ESMA published the Guidelines in all official EU languages.
- 21 October 2024: Deadline for national competent authorities to notify ESMA whether they complied, or intended to comply, with the Guidelines.
- 21 November 2024: The Guidelines began to apply. New funds established on or after this date must comply with the Guidelines from the outset.
- 21 May 2025: End of the transitional period for existing funds, which were required to be in full compliance by this date.
- 8 November 2022: ESMA launched a consultation on draft Guidelines on funds’ names using ESG or sustainability-related terms.
- 14 May 2024: ESMA published its final report and adopted the Guidelines.
- 21 August 2024: ESMA published the Guidelines in all official EU languages.
- 21 October 2024: Deadline for national competent authorities to notify ESMA whether they complied, or intended to comply, with the Guidelines. On the same day, the CSSF published Circular CSSF 24/863 and introduced the priority processing procedure.
- 21 November 2024: The Guidelines began to apply. New funds established on or after this date must comply with the Guidelines from the outset.
- 13 December 2024: ESMA published Q&As providing further clarification on the practical application of the Guidelines.
- 18 December 2024: The CSSF published a communiqué on the ESMA Q&As.
- 19 March 2025: ESMA published a compliance table showing how national competent authorities apply the Guidelines.
- 4 April 2025: The CSSF updated the fund naming confirmation letter for PPP filings.
- 21 May 2025: End of the transitional period for funds established before 21 November 2024. Such funds were required to be in full compliance by this date.
- 20 November 2025: The European Commission published its proposal to revise the SFDR.
- 24 June 2026: The Council adopted its negotiating position on the SFDR revision.
- 5 October 2026: The European Parliament adopted its negotiating position on the SFDR revision.
Currently, there is no consultation open or pending.
- Guidelines on funds’ names using ESG or sustainability-related terms
- CSSF Communication to the investment fund industry in relation to the ESMA Guidelines on funds’ names using ESG or sustainability-related terms
- Fund naming confirmation letter accompanying the submission of the fund prospectus/issuing document (“Prospectus”) updated in accordance with the ESMA Guidelines on funds’ names (“GL”) under the priority processing procedure (“PPP”)
- https://www.esma.europa.eu/press-news/esma-news/esma-puts-forward-qas-application-guidelines-funds-names
