ESMA promotes clarity in claims on impact and transition

Key dates

2026-10-12

ESMA published the thematic notes on impact claims and climate transition claims.

Suggested considerations

• Compliance teams may wish to inventory all impact and climate transition claims appearing in websites, fund marketing, factsheets, presentations, social media, bond materials and benchmark communications.
• Firms should consider documenting the causal theory behind each positive impact claim, including the investment or financing activity expected to generate the impact and the distinction between intended, expected and achieved outcomes.
• Firms should consider establishing measurable impact indicators, calculation methodologies, baselines, monitoring frequency and governance for reviewing whether claimed outcomes have occurred.
• Firms making transition claims should consider documenting the transition objective, eligibility criteria, milestones, target dates, implementation actions, dependencies on investee companies or other parties, and the process for reporting slippage.
• Marketing and product-governance reviews may wish to require prominent explanation of material assumptions, data gaps, estimates, methodological limitations and uncertainty surrounding forward-looking claims.
• Firms should consider checking that claims are consistent across regulatory disclosures, marketing communications, portfolio holdings, bond frameworks, benchmark methodologies and public sustainability reports.
• Compliance teams may wish to retain evidence supporting each claim and to review whether qualifying information is sufficiently clear, balanced and proximate to the claim rather than hidden in technical documentation.
• Firms should consider assessing whether product names, labels, comparisons, impact figures and transition terminology could create an impression of guaranteed or already-achieved environmental or social outcomes.

What changed

ESMA has provided practical do's and don'ts for non-regulatory communications containing impact or climate transition claims, based on observed market practices. Firms communicating positive impact claims should explain the intended difference, the mechanism through which impact is expected to arise, and how outcomes will be measured. Firms making climate transition claims should describe the transition ambition, implementation approach, assessment of progress, relevant assumptions, data limitations and external dependencies. The notes expressly do not impose new regulatory or reporting requirements, prescribe a particular transition ambition, or determine the outcome of the ongoing SFDR review. Independent market commentary on ESMA's earlier thematic notes has treated the initiative as a

Who is affected

• EU-authorised investment fund managers and UCITS management companies
• Alternative investment fund managers marketing funds in the EU
• Investment firms and distributors communicating sustainability claims to clients or prospective investors
• Issuers and arrangers of green, sustainability-linked or transition bonds
• Administrators and providers of climate or sustainability benchmarks
• Financial market participants preparing websites, presentations, factsheets, fund documentation or other non-regulatory investor communications

Related regulations

• Sustainable Finance Disclosure Regulation (SFDR)
• EU Taxonomy Regulation
• MiFID II
• UCITS Directive
• Alternative Investment Fund Managers Directive (AIFMD)
• EU Benchmarks Regulation
• Prospectus Regulation