Nordea Asset Management (NAM) has announced that it will retain or add the term “sustainable” to the names of 17 of its Nordea 1 SICAV funds, positioning itself early for compliance with the European Securities and Markets Authority’s (ESMA) new guidelines on fund naming.
The move comes ahead of ESMA’s sustainability-related naming rules, set to take effect in May 2025, which aim to combat greenwashing by ensuring that funds using ESG or environmental terms meet specific investment thresholds. Under the guidelines, funds must allocate at least 80% of assets to investments aligned with the fund’s stated sustainability characteristics and adhere to exclusion criteria consistent with Paris-Aligned Benchmarks (PABs).
“We see these new rules as a necessary step toward building investor trust and market integrity,” said a Nordea spokesperson.
ESMA introduced the rules in response to the growing use of terms like “green,” “ESG,” and “sustainable” in fund names—often without clear alignment to underlying investments. A recent analysis suggests that up to two-thirds of such labelled funds in the EU could need to alter names or portfolios to comply.
Nordea’s early commitment signals confidence in its sustainability framework and offers investors reassurance as regulatory scrutiny intensifies across the financial sector.
