### Fighting Greenwashing: The Intervention of European Regulatory Authorities and the Future of Sustainable Finance

The first half of 2024 marks an important turning point in the landscape of sustainable finance, as European Regulatory Authorities, namely ESMA (European Securities and Markets Authority), EBA (European Banking Authority), and EIOPA (European Insurance and Occupational Pensions Authority), intervene with new regulations aimed at combating the phenomenon of greenwashing. This increasingly relevant issue involves not only financial institutions but also consumers, who find it difficult to navigate a constantly evolving and often unclear market.

### The Regulatory Context

The new guidelines are aligned with Directive (EU) 2024/825, which introduced “sustainability assertions” into consumer protection rules concerning products declared sustainable. Greenwashing, defined as the dissonance between the sustainability claims of a product or service and its actual environmental footprint, thus becomes a target to ensure fair and non-misleading information to investors.

### A New Regulatory Balance

The work of the Regulatory Authorities moves in various directions, aimed at systematizing and making existing sustainability regulations more applicable. One of the highlights is the shift from a regulation based on the autonomy of operators towards greater heteronomy, with the introduction of specific rules and prohibitions. This change indicates a strong commitment to making the sustainable finance market not only more efficient but also more responsible.

#### Ambitious Goals and Practical Applications

One of the first requests from the Authorities concerns the ambition of sustainability goals pursued by intermediaries. The absence of ambitious goals can lead to a passive attitude towards sustainability, contradicting the need to generate real market impact. Furthermore, the risk of legal disputes increases, considering the pressures from non-governmental organizations and increasingly attentive and critical citizens.

The issue of data governance and impact measurement represents another key challenge. Having reliable and measurable data is crucial for demonstrating the validity of sustainability claims. The new regulations therefore call for a closer alignment between sustainability policies in the financial sector and those in the industrial sector.

### ESMA Guidelines

In May 2024, ESMA published guidelines regarding fund nomenclature, applicable to all collective investment scheme managers. These guidelines establish specific rules for the use of terms related to ESG factors (Environmental, Social, and Governance) in fund names, aimed at preventing greenwashing.

#### Essential Requirements

All collective investment schemes must ensure that at least 80% of their investments align with the declared sustainability strategy. This implies the exclusion of investments in companies engaged in harmful activities, such as the production of controversial weapons or the tobacco sector. Additionally, funds claiming to be “green” or “impact” must demonstrate rigorous compliance with sustainability standards.

### EBA Guidelines on Greenwashing

In parallel, the EBA has identified practices to combat greenwashing. These practices focus on providing clear and balanced information regarding sustainability aspects, which must be supported by verifiable and measurable data.

#### Key Principles

1. **Fair Communication**: Information must be clear, up-to-date, and understandable to the public.
2. **Internal Governance**: It is essential that…