The European Securities and Markets Authority (ESMA), published a combined report on its 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) on marketing disclosure rules under MiFID II. ESMA, together with the National Competent Authorities (NCAs), states that marketing communications and advertisements generally comply with MiFID II requirements. Investment firms generally have procedures in place that ensures compliance with the rules for marketing materials. However, there are increasing concerns about marketing material which includes sustainability claims. ESMA identified several areas of improvements and announces that further supervisory actions in this area shall be undertaken.


Together with National Competent Authorities (“NCA“) and a Mystery Shopping Exercise (“MSE“), ESMA launched a Common Supervisory Action (“CSA“) in 2023 on the application of MIFID II disclosure requirements with regard to marketing communications which also focuses on sustainability aspects. The NCA-reports included a review of examples of marketing communications and of their compliance with MIFID II disclosure requirements. CSA and MSE were used for the purpose of gathering evidence on the topic of greenwashing.

On 27 May 2024, ESMA published its findings in a Final Report (ESMA35-335435667-5931). The key conclusions regarding sustainability claims in marketing materials are summarised below.

A. ESMA’s conclusion regarding processes and procedures related to sustainability:

      ESMA emphasises in the Final Report that internal processes and procedures of the reviewed firms with regard to the development of sustainability related advertisements shall include control functions and senior management, in order to safeguard that the sustainability claims are fair, clear and non-misleading. In addition, ESMA states that this also may reduce greenwashing risks.

      In this context, ESMA points out the reporting of some NCAs. NCAs have evaluated marketing material with regard to the sustainability of the instrument or the entity and whether this specific information is presented in a fair, clear and non-misleading way. ESMA indicates in the Final Report that the majority of the analysed marketing material refers to funds with sustainable features. Only a few reports were related to green bonds or the promotion of certificates and structured notes.

      Among other things, NCAs have reported that (1) firms do not have specific processes and procedures for sustainability related claims in marketing material and (2) only in some cases, firms implemented additional controls which included e.g.:

      • the involvement of sustainability officer or unit (when ESG-topics are material to advertisements),
      • consistency checks when creating the inclusion of sustainability claims in marketing material and relevant documentation (e.g. European ESG templates, publicly available information such as ESG ratings, etc.),
      • the development of internal guidance regarding products with a particular risk of greenwashing,
      • ex-post reviews to minimise the risk of greenwashing, and
      • consultation of sustainability experts for the review and correction of deficiencies of market communication.

      B. ESMA’s conclusion regarding the presentation of information on sustainability issues in marketing material:

          ESMA emphasises that financial instruments and services that are subject to MIFID II, have to be fair, clear and non-misleading. ESMA is concerned about the examples of non-compliant sustainability claims reported by some NCAs, such as:

          • advertising that a financial instrument supports the environment, without supporting the green nature of such instrument with any evidence, and
          • the sustainability characteristics of financial instruments are not presented in a balanced way compared to the other characteristics of the instruments.

          In these cases, according to ESMA, potential investors would be given the misleading impression that these financial instrument are ESG-oriented, even though they are not.

          Once again, in this context ESMA highlights the received NCA-reports. Overall, the authorities noticed that the level of detail regarding ESG-features differed significantly from one entity to the other. These reports included statements such as:

          • advertisements usually contain generic references, such as general references to environmental, social and governance aspects (without referring to the disclosure requirements of Art. 8 and 9 Reg. (EU) No. 2019/2088 (SFDR)),
          • in many cases, ESG-related information and disclosures were not substantiated with data or sources (e.g. references to ESG ratings or refences to sustainability statements in regulation without any links to relevant documents), and
          • information was often not presented in a balanced manner (e.g. it was often not sufficiently pointed out that a financial instrument also contains non-sustainable features).

          Certain NCAs considered – as a positive example – that some entities have mentioned in their marketing material, that they were following net zero plans or adhering to reporting initiatives such as UNPRI, UN Global Compact or Net Zero Banking Alliance, while not promoting themselves as “green” or “sustainable”.

          C. ESMA’s Final Report regarding next steps:

            To ensure that regulatory breaches are remedied, certain NCAs will undertake follow-up actions on individual cases. In addition, ESMA wants to continue the communication with NCAs on these topics and exchange on their planned follow-up actions. Furthermore, ESMA will provide technical advice to the European Commission, where needed, to support the development of delegated acts.

            Photo of Patrick Scholl Patrick Scholl

            Patrick Scholl is a partner and head of Mayer Brown’s Banking & Finance practice in Frankfurt. Patrick leads the Mayer Brown capital markets and derivatives offering in Germany with an European focus. His team advises on debt capital markets issuances and disclosures, debt…

            Patrick Scholl is a partner and head of Mayer Brown’s Banking & Finance practice in Frankfurt. Patrick leads the Mayer Brown capital markets and derivatives offering in Germany with an European focus. His team advises on debt capital markets issuances and disclosures, debt issuance programms, hybrid capital instruments as well as liability management transactions. The OTC derivatives practice focuses on advising and negotiating master agreements (including repos and stock lending), collateral solutions, netting questions and provides transaction support with regard to all underylings, including equity-linked, credit-linked, fund-linked or commodity-linked derivatives.

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