Invesco Markets II plc has announced revisions to the names of several exchange-traded funds (ETFs), effective 3 February 2025, to align with the European Securities and Markets Authority’s (ESMA) enhanced guidelines on sustainability-related fund naming. The changes aim to ensure clarity and adherence to ESMA’s investment and exclusion criteria for funds using terms like “ESG.”
The updates include removing the term “ESG” from ETFs whose reference indices do not meet the exclusionary criteria for Paris-aligned Benchmarks (PAB exclusions) under EU regulations. For example, the Invesco MSCI Europe ESG Leaders Catholic Principles UCITS ETF will be renamed the Invesco MSCI Europe Catholic Principles UCITS ETF, reflecting the index’s updated name, MSCI Europe Select Catholic Principles Selection 10/40 Index.
Another fund, the Invesco FTSE All Share ESG Climate UCITS ETF, will be renamed the Invesco FTSE All Share Screened & Tilted UCITS ETF, removing references to “ESG” and “Climate” to better align with ESMA’s requirement for fund names to accurately describe their investment strategies.
Shareholders affected by these changes have been informed of their right to redeem holdings without penalty, as specified in the Prospectus. Updated supplements reflecting the new names will be released shortly after the effective date.
These updates come amid growing regulatory efforts to prevent ‘greenwashing’—the overstatement of environmental benefits in financial products. ESMA’s guidelines emphasise transparency and alignment between fund names and their actual strategies to safeguard investor trust.
By adopting these changes, Invesco reaffirms its commitment to regulatory compliance and to providing clarity for investors navigating the evolving landscape of sustainability-focused financial products.
