One green claim, two regulators: ESMA’s new notes and the FCA’s anti-greenwashing rule
ESMA’s new do’s and don’ts for impact and climate transition claims mean the same sentence now has to satisfy ESMA and the FCA.
On 12 October 2026 ESMA published two more thematic notes on sustainability claims: one on positive impact claims, one on climate transition claims. ESMA, ESMA promotes clarity in claims on impact and transition. They follow earlier notes in the same series on ESG credentials and ESG strategies.
The notes do not create new requirements. What they do is show, with examples drawn from observed market practice, what a clear, fair and not misleading sustainability claim looks like in marketing.
What ESMA asks for
Impact claims. Firms understand positive environmental or social impact differently and attach different levels of ambition to it. ESMA encourages them to explain:
- what difference they expect to make;
- how they aim to generate that impact;
- how they will measure the results.
Climate transition claims. These are often forward-looking and uncertain, because reaching them depends on future actions, assumptions and outside factors. ESMA asks firms to communicate clearly:
- what the transition ambition is;
- how it is expected to be implemented;
- how progress will be assessed and reported, including the assumptions, data limitations and dependencies.
The UK already has a rule for this
Since 31 May 2024 the FCA’s anti-greenwashing rule has applied to every authorised firm. ESG 4.3.1R requires any reference to the sustainability characteristics of a product or service, including in a financial promotion the firm communicates or approves, to be:
- consistent with the sustainability characteristics of the product or service; and
- fair, clear and not misleading.
The FCA’s guidance, FG24/3, says claims should be correct and capable of being substantiated, clear, complete (not hiding important information, considering the full life cycle) and, where they compare, fair and meaningful.
The two regimes use different words for the same discipline: say exactly what you mean, and be able to prove it.
Our angle: evidence the claim once, for both markets
Cross-border campaigns reuse copy. The same banner runs on a UK website and in a Cypriot or Irish campaign, with a translated risk warning and the same sustainability line. Take this one:
“Our Transition Fund is helping Europe reach net zero.”
| Question | ESMA’s notes | FCA rule and guidance |
|---|---|---|
| What exactly is claimed? | Name the ambition: whose emissions, by when, measured how | Must be consistent with the fund’s actual sustainability characteristics |
| Is “helping” supported? | Explain how the fund generates the effect, not only what it holds | Correct and capable of substantiation |
| What could stop it? | State the assumptions, data limits and dependencies | Complete: no omission of important information |
| How will progress be shown? | Say how progress will be assessed and reported | Clear, and not misleading by what is left out |
A claim that passes the stricter reading on each line passes both. A claim checked separately in each market tends to be fixed twice, differently, and the two versions drift.
A workable process
- Keep a claims register. Every sustainability sentence used in marketing, the products it is used for, and where it runs.
- Attach the evidence to the claim, not the campaign. The impact methodology, the transition plan, the data source and its limits.
- Write the limits into the copy. If the claim depends on assumptions, ESMA expects the communication to say so; burying them in a document few clients will read is the poor practice the notes describe.
- Re-check when the product changes. A change in holdings or strategy can make a true claim false.
This is a suggested process, not legal advice.
Connor Financial Promotions reads a promotion against the rules for each market it targets in one scan, so a UK and EU campaign is checked against the FCA’s rules and the EU rules together, with each finding citing the rule and its source.
Frequently asked questions
Do ESMA’s thematic notes create new rules?
No. ESMA says the notes do not create new regulatory requirements. They give practical do’s and don’ts, with examples of good and poor practice, to help firms keep sustainability claims in non-regulatory communications clear, fair and not misleading.
What does the UK anti-greenwashing rule require?
ESG 4.3.1R requires an FCA-authorised firm to ensure that any reference to the sustainability characteristics of a product or service, including in a financial promotion it communicates or approves, is consistent with those characteristics and is fair, clear and not misleading. FCA guidance FG24/3 adds that claims should be correct and capable of substantiation, clear, complete and fairly compared.
Which marketing does this cover?
ESMA’s notes look at claims made through funds, bonds and benchmarks, in communications such as adverts, websites and social media rather than regulatory documents. The UK rule covers communications with UK clients about products and services and financial promotions communicated to people in the UK.
James Zhao
Co-founder, ConnorJames is a co-founder of Connor. After a corporate career at Barclays and KPMG as a software engineer, he built and exited his own software company. He has spent the last three years at the forefront of AI, and the most recent of them building AI-native products and the agent platform behind Connor.
Kashif Rafiq
Co-founder, ConnorKashif is a co-founder of Connor. He spent his career inside two of the most heavily monitored industries there are, investment banking at Goldman Sachs and energy at BP, working on the security and technology systems that keep regulated communications and data under control. He now builds Connor, which checks financial promotions against the rules that apply to them.
Financial Promotions
Financial Promotions
Financial Promotions