The European Securities and Markets Authority (ESMA) has published its first thematic note to guide issuers, fund managers, and other market participants on responsible use of sustainability-related claims and how to mitigate greenwashing risks in investor communications.

Focusing on ESG credentials—such as labels, ratings, certificates, awards, and voluntary initiatives—the note warns that these claims can mislead investors if their significance is overstated or not properly contextualized. Examples include referencing ESG labels, net zero alliances, or voluntary reporting frameworks without disclosing limitations or responsibilities.

While the note introduces no new legal requirements, it lays out four key principles that all sustainability claims should follow:

· Accurate: Fair, balanced, and not exaggerated; avoids omissions or irrelevant details.

· Accessible: Understandable and easy to find; avoids oversimplification.

· Substantiated: Backed by credible, clear data and methodologies; includes context and limitations.

· Up to Date: Reflects current information; revised promptly if circumstances change.

To support practical implementation, ESMA includes “Do’s and Don’ts” and case examples of both strong and weak practices related to ESG credentials, industry affiliations, and peer comparisons. For instance, firms are urged to clarify the implications of participating in an initiative—such as reporting obligations or emission reduction commitments—and avoid referencing defunct memberships or cherry-picking benefits.

This thematic note is part of a broader EU-wide regulatory push against greenwashing, following a 2022 request from the European Commission. It complements ongoing efforts by the European Supervisory Authorities (ESAs)—including EBA, EIOPA, and ESMA—to strengthen market supervision, enhance investor protection, and increase transparency around ESG claims.

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