In a new edition of its publication Reden wir über Aufsicht (Let’s talk about supervision), the Austrian Financial Market Authority (FMA) informs Austrian fund companies about the implementation of the European rules on funds’ names, that uses certain designations with a sustainability connection. The Guidelines introduced by the European Securities and Markets Authority (ESMA) is intended to ensure that financial market investors receive a realistic picture, and that no claims are made in marketing and sales for products which do not stand up in reality. The promise to channel collected money into causes for ecological, social or the corporate good (ESG) can already be hinted at in the name of a fund, such as when terms such as ‘green’, ‘sustainable’ or ‘ESG’ are used to attract attention. According to the FMA’s findings, there are at least 223 funds in Austrian with net asset value of approximately € 43 billion that are covered by the ESMA Guidelines.
The Guidelines, which the FMA adopted into its supervisory practices last year, defined for the first time on a Europe-wide level, that at least 80% of investments are actually required to meet the corresponding criteria. In other words: if the name implies a specific ESG investment goal then at least 80% of the management assets must also meet this objective. Previously, due to an absence of European regulatory standards, in many cases a threshold of only 50% was used.
The Guidelines also stipulate criteria for exclusion: Depending on the ESG-related term in the fund name, investments in companies from certain sections are also not permitted: coal, oil, gas and emission-intensive generation of electric power, controversial weaponry, tobacco, as well as firms that do not pursue specific good governance principles.
The fourth edition of Reden wir über Aufsicht “Let’s talk about supervision” entitled “ESG-Fondsnamen: What’s in a name?” (ESG Fund names: what’s in a name?) explains specific details and specificities for the Austrian market. The publication series, in which the FMA presents its supervisory expectations about recent issues, was launched last year.
The new edition of Reden wir über Aufsicht can be found on the FMA website here. Previous editions of the publication series can be read here. The FMA’s press release about the ESMA Guidelines from 2 October 2024 can be found here. Further information from the FMA about the issue of Sustainable Finance can be found here.
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43 (1) 249 59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]