So that it says "sustainable" when it says "sustainable" - new naming rules for investment funds

The Austrian Financial Market Authority (FMA) has published a new edition of the publication "Reden wir über Aufsicht" (Let's talk about supervision) to inform domestic fund companies about the implementation of European requirements for fund names that make reference to sustainability using certain terms. In short: it's pure wine for investors.

The promise to channel the money collected into environmental, social or corporate good (ESG) causes can already be hinted at in the name of a fund, for example when terms such as "green", "sustainable" or ESG are used to attract attention.

According to the FMA's findings, at least 223 funds with around Ꞓ43 billion in fund assets are affected by the ESMA guideline in Austria.

The guideline, which the FMA adopted into its supervisory practice last year, stipulates for the first time across Europe that at least 80% of investments must actually meet the relevant criteria. Roughly speaking, this means that if a specific ESG investment objective is implied by the name, then at least 80% of the assets under management must also meet this objective. Until now, a threshold of 50% has been used in many cases due to a lack of European regulatory requirements.

The guidelines also provide for exclusion criteria:

Depending on the ESG-related term in the fund name, investments in companies in certain sectors are excluded: Coal, oil, gas and emission-intensive power generation, controversial weapons, tobacco and companies that do not follow specific principles of good governance.

The new edition of "Let's talk about supervision" can be found on the FMA website here.