New regulations: are we heading towards more or less greenwashing of funds?

The French Financial Markets Authority (AMF) is adopting ESMA guidelines on ESG fund naming starting May 21, 2025, but Reclaim Finance argues these rules create uneven requirements that risk 'transition-washing'. The document notes a 24% decrease in 'Article 9' funds under SFDR due to reclassification to 'Article 8' to avoid sanctions. To combat greenwashing, the author proposes that the 2025 SFDR revision should mandate the exclusion of companies developing new fossil fuel projects for all funds claiming environmental or social objectives.

• The AMF's adoption of ESMA guidelines, effective May 21, 2025, establishes three fund categories with varying requirements: 'Transition,' 'Social,' or 'Governance' funds; 'Environment' or 'Impact' funds; and 'Sustainable' funds. A critical weakness is that if a fund combines transition terms with more demanding terms like 'impact' or 'environment', only the "weaker constraints associated with “transition” will apply."
• There has been a significant shift in fund classification under the SFDR regulation, with assets in 'Article 9' funds—intended to have the highest sustainability standards—dropping by 24% in one year as managers reclassify them as 'Article 8' to avoid sanctions.
• Despite the growth of responsible investments in Europe to over €2,500 billion in assets under management, many funds with environmental claims still invest in fossil fuel projects incompatible with a 1.5°C warming limit.
• Reclaim Finance proposes that the 2025 SFDR revision should implement three core criteria: excluding companies developing new fossil fuel projects from funds with environmental or social objectives, establishing differentiated minimum requirements based on claims, and strengthening transparency and advisory obligations.

APA

Martin, L. (2025). New regulations: are we heading towards more or less greenwashing of funds? Reclaim Finance. https://reclaimfinance.org/site/en/2025/01/30/new-regulations-are-we-heading-towards-more-or-less-greenwashing-of-funds/

Chicago

Martin, Léo. New regulations: are we heading towards more or less greenwashing of funds? Reclaim Finance, 2025. https://reclaimfinance.org/site/en/2025/01/30/new-regulations-are-we-heading-towards-more-or-less-greenwashing-of-funds/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=New regulations: are we heading towards more or less greenwashing of funds? |publisher=Reclaim Finance |date=30 January 2025 |url=https://reclaimfinance.org/site/en/2025/01/30/new-regulations-are-we-heading-towards-more-or-less-greenwashing-of-funds/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2025new, author = {Martin, Léo}, title = {{New regulations: are we heading towards more or less greenwashing of funds?}}, publisher = {Reclaim Finance}, year = {2025}, month = jan, url = {https://reclaimfinance.org/site/en/2025/01/30/new-regulations-are-we-heading-towards-more-or-less-greenwashing-of-funds/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }