Stockholm (NordSIP) – In an effort to combat greenwashing, the European Securities and Markets Authority (ESMA) announced and published guidelines establishing harmonised criteria for the use of ESG and sustainability terms in fund names during 2024. The guidelines were applicable to new funds from November 2024, three months after the August 2024 publication of the Guidelines on ESMA’s website in all EU official languages. The same guidelines are applicable to existing funds from 21 May 2025, six months after the date of application of the guidelines.
As the final deadline approaches, asset managers have started adjusting the names of their funds to comply with these rules. Contrary to other cases, Nordea’s reaction to this new environment shows that regulatory clarifications don’t always have to force fund managers to downgrade their commitments.
The New Rules
According to the new guidelines, the use of ESG-related terms requires the establishment of a minimum threshold that 80% of investments meet environmental, social characteristics or sustainable investment objectives.
The guidelines also apply exclusion criteria for different terms used in fund names. “Environmental”, “Impact” and “sustainability”-related terms will have to apply exclusions consistent with Paris-aligned Benchmarks (PAB). Terms related to “Transition, “Social” and “Governance” will require that funds apply exclusions consistent with the Climate Transition Benchmarks (CTB).
In cases of a combination of terms, use of transition, sustainability- and impact-related terms, and for funds designating an index as a reference benchmark, further criteria are specified in the Guidelines.
Funds with ESG terms in their names will either need to comply with the restrictions or change their names. The naming guidelines help customers navigate among ESG and sustainability-related funds.
Nordea Changes Fund Names
In compliance with the new rules, Nordea announced it would change the name of 23 of its funds to include the words “Sustainable”, “Transition”, “Ansvar” (meaning “Responsible” in Swedish), a spokesperson for Nordea tells NordSIP.
| Existing Fund Name | New Fund Name | Date for Implementation | Country of Registration |
| Nordea Asian Stars Equity Fund | Nordea Asian Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea Emerging Stars Equity | Nordea Emerging Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea Emerging Stars ex China Equity | Nordea Emerging ex China Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea European Corporate Stars Bond Fund | Nordea European Corporate Sustainable Stars Bond | 08-Apr-25 | Luxembourg |
| Nordea European High Yield Stars Bond Fund | Nordea European High Yield Sustainable Stars Bond | 08-Apr-25 | Luxembourg |
| Nordea European Small and Mid Cap Stars | Nordea European Small and Mid Cap Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea European Stars Equity Fund | Nordea European Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea Global High Yield Stars Bond Fund | Nordea Global High Yield Sustainable Stars Bond | 08-Apr-25 | Luxembourg |
| Nordea Global Stars Equity Fund | Nordea Global Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea Nordic Stars | Nordea Nordic Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea North American High Yield Stars Bond Fund | Nordea North American High Yield Sustainable Stars Bond | 08-Apr-25 | Luxembourg |
| Nordea North American Stars | Nordea North American Sustainable Stars | 08-Apr-25 | Luxembourg |
| Nordea Omställningsbolag | Nordea Climate Transition Engagement | 08-Apr-25 | Luxembourg |
| Nordea US Corporate Stars Bond Fund | Nordea US Corporate Sustainable Stars Bond | 08-Apr-25 | Luxembourg |
| Nordea Swedish Short-Term Bond Stars | Nordea Swedish Short-Term Sustainable Stars Bond | 15-Apr-25 | Luxembourg |
| Nordea European Stars | Nordea European Sustainable Stars | 24-Apr-25 | Finland |
| Nordea Hållbarhetsfond Avkastning | Nordea Avkastning Ansvar | 24-Apr-25 | Finland |
| Nordea Hållbarhetsfond Balanserad | Nordea Balanserad Ansvar | 24-Apr-25 | Finland |
| Nordea Hållbarhetsfond Försiktig | Nordea Försiktig Ansvar | 24-Apr-25 | Finland |
| Nordea Hållbarhetsfond Obligationer Global | Nordea Obligationer Global Ansvar | 24-Apr-25 | Finland |
| Nordea Hållbarhetsfond Tillväxt | Nordea Tillväxt Ansvar | 24-Apr-25 | Finland |
| Nordea Innovation Stars | Nordea Innovation Sustainable Stars | 24-Apr-25 | Finland |
| Nordea Yield Fund | Nordea Short-Term Corporate Sustainable Stars Bond | 24-Apr-25 | Finland |
At a time when sustainable finance is under significant pressure, it is encouraging to note that some asset managers are not forced to downplay their sustainability commitments when new regulations clarify the rules of the market. This is not always the case. According to Morningstar data, some 40% of funds were shifted from Article 9 to Article 8 just in the final three months of 2022, and the trend persevered for a couple of months into the new year as well.
