The European Securities and Markets Authority (ESMA) has issued guidelines for investment funds using terms such as ‘sustainable’, ‘ESG’, ‘impact’ or ‘transition’ in their names. Although not formal regulations, these guidelines set clear minimum criteria to enhance transparency, prevent greenwashing and help investors identify funds that align with their own sustainability preferences.
What do the ESMA guidelines mean in practice?
From 21 May 2025, funds with sustainability-related names must meet specific standards, including an 80% minimum thresholds for sustainable investments. Depending on the terminology used (e.g. ‘impact’ or ‘transition’) must also meet additional term-specific requirements. Transparent reporting on how these standards are met is required.
ESMA guidelines and Triodos IM funds
Across the European market, the introduction of the guidelines has led many asset managers to review, and in some cases change, the names of their funds to ensure compliance. Triodos IM funds use a range of social, environmental, impact and transition-related terms. All funds already meet ESMA’s criteria, so no fund names have changed. However, we have updated the Triodos Bank Minimum Standards to align the wording with the Paris-Aligned Benchmark Exclusions and Climate Transition Benchmark Exclusions, and to ensure full alignment with the guidelines.
Fund-specific information is included in the disclosures below.
