ESMA Tells Managers to Show Their Sustainability Marketing Claims on Impact and Climate Transition | ProFundCom

October 28, 2026 Fund Marketing Intelligence

ESMA Tells Managers to Show Their Sustainability Marketing Claims on Impact and Climate Transition

- Elliot Burr - October 28, 2026 - 10:12 am

Fund managers need to audit their sustainability messaging in light of two recent guidance notes posed by ESMA.

TL;DR: substantiate any sustainability claims.

The European Securities and Markets Authority (ESMA) is driving its expectations for any claims made by funds in their sustainability marketing through two notes – (1) that they deliver impact, and (2) account for a climate transition – and provides details on good and poor practice.

While there are no newfound legal requirements, these notices give an idea for how regulators will likely read the marketing materials they see, particularly non-regulatory materials including pitch decks, factsheets, websites and voluntary reporting.

They do not include legal documents such as private placement memoranda, or Sustainable Finance Disclosure Regulation (SFDR) pre-contractual and periodic disclosures, but do sit within SFDR Article 13(1) which stipulates that marketing should not contradict these disclosures.

Elsewhere, law firm Proskauer notes that the two notes will likely inform how national authorities also assess materials from non-EU managers that market in the region under national private placement regimes.

Notes on ‘Impact’

Here, ESMA is looking for intentionality, additionality and measurability.

Good practice involves explaining the problem that a fund is targeting, and putting forward a ‘theory of change’ for how impact is measured and achieved.

Poor practice however means labelling ‘impact’ because of a fund’s asset class or sector, presenting standard ESG engagement as impact, relying on exclusion or ESG risk metrics, and broadly citing UN Sustainable Development Goals.

Another red flag involves taking full credit for an investee’s progress without acknowledging other investors.

Notes on ‘Climate transition’

Here, ESMA focuses on ambition, implementation, and progress.

Managers should come with baseline targets, milestones, a time horizon, and stated emissions scopes, and report against earlier targets – including delays and goals that may no longer be achievable.

One example given by the note is ‘a 30% portfolio carbon intensity cut by the end of 2029 against a 2024 baseline’. The claim should be explicit that it concerns portfolio metrics and not real-world emissions reductions.

Be substantive

Claims must be accurate, accessible, evidential and up-to-date, with methodology changes and favourable outcomes explained.

Double-check your content vocabulary

Where “impact” and “climate transition” is mentioned in decks, websites, DDQs and socials, document how the term is based on your firm’s actual investment strategy.

Build an evidence file

Keep the theory of change, KPI definitions, baselines and data limitations on file for regulators.

Keep claims current

Unexplained metric changes and old targets are risky, and can be avoided by adding refresh dates to sustainability slides (which should be maintained by a designated reviewer).

Align marketing formal documents

Reviewers will first check any discrepancies between decks and the SFDR disclosures. So too should US and UK managers that raise from European LPs through private placement expect these standards to be applied informally.

Sources

ESMA, ESMA thematic note on impact ESMA, ESMA thematic note on transition claims Proskauer Rose LLP via National Law Review, “ESMA Guidance on Impact and Climate Transition Claims”