The European Securities and Markets Authority (ESMA), the EU’s securities and financial markets regulator, has published an article exploring the use of language related to environmental, social and governance (ESG) factors in fund names and documentation of EU investments.
In this study, ESMA shows that the share of EU UCITS investment funds with ESG words in their name has increased from less than 3% in 2013 to 14% in 2023. The article further points out that fund managers tend to prefer using a generic language (”ESG”, “Sustainable”) rather than more specific words. This can make it more difficult for investors to verify that the fund’s portfolio is consistent with the name.
https://www.esma.europa.eu/document/trv-article-esg-names-and-claims-eu-fund-industry