AMF Adopts ESMA Guidelines on ESG and Sustainability-Related Fund Names

On 16 December 2024, the Autorité des marchés financiers (AMF) has decided to apply ESMA’s Guidelines on funds’ names using ESG or sustainability-related terms.

As a reminder, ESMA’s final report on such Guidelines was published on 14 May 2024, setting out conditions pursuant to which a fund may use ESG/sustainability-linked terms in its name, in order to avoid customer being misled as to the nature of the investments made by the fund.

Nonetheless, various national authorities, including the AMF, submitted clarification requests to ESMA sharing market dissident opinions on specific aspects of its practical application.

On 13 December 2024, ESMA published Q&As specifying practical aspects of the “the green bonds”, “the meaningfully investing in sustainable investments” and the “controversial weapons” provisions.

ESMA’s Q&As position ensures that:

• All funds whose name contain environment, impact and sustainability terms can invest in European Green Bonds (EuGBs) and any other types of green bonds that do not fall under the scope of an exclusion criterion.
• To be classified as "meaningfully investing in sustainable investments," funds must have over 50% of their portfolio dedicated to such investments.

• For the exclusion of controversial weapons, reference is being made to Sustainable Finance Disclosure Regulation (SFDR) principal adverse impact indicator 14.

These clarifications have won the AMF’s opinion, which has decided to apply ESMA’s guidelines on funds’ names and to undertake all the necessary adjustments to pursue its adaptations on its Position-Recommendation DOC-2020-03 which are expected to be published before the end of the year.

These Guidelines apply to new funds since 21 November 2024 and will enter in application on 21 May 2025 for existing funds.