As noted above under “Investment objectives and fund names”, where a fund’s name references ESG, the fundamental investment objectives of the fund are required to reference the aspect of ESG included in the name of the fund.
Accordingly, where a fund intends to change its name to add or remove a reference to ESG, the fund should consider whether it is also required to change its fundamental investment objectives.
Staff remind funds that an investment fund that changes its fundamental investment objectives is required to obtain the prior approval of its securityholders. [FN 43] Consequently, the addition or removal of references to ESG in the fundamental investment objectives of a fund is subject to the requirement to obtain prior securityholder approval.
Staff note that a fund that does not have ESG-related investment objectives may still use ESG strategies and may therefore reference ESG in its investment strategies disclosure without referencing ESG in its name or indicating that the fund is focused on ESG in its sales communications. Where an ESG strategy is not a material or essential aspect of a fund and is therefore not included in the fund’s fundamental investment objectives, a fund that adds or removes disclosure about the ESG strategy in its investment strategies disclosure is not subject to the securityholder approval requirement in NI 81-102.
The guidance above is illustrated in Figure 2.
FN 43 Paragraph 5.1(1)(c) of NI 81-102.
