This Notice
- provides an overview of common ESG-related terms and strategies,
- summarizes the scope and purpose of, and key findings from, the ESG-Focused Reviews, and
- provides updated, relevant and practical guidance for investment funds, particularly ESG-Related Funds, and their IFMs to enhance the ESG-related aspects of the funds’ regulatory disclosure documents and ensure that the sales communications of such funds are not untrue or misleading and are consistent with the funds’ regulatory offering documents.
This Notice updates the guidance from the 2022 Notice to address developments and issues that have arisen since the publication of the 2022 Notice, as well as to provide guidance for specific types of ESG-Related Funds. The major changes in this Notice compared to the 2022 Notice are as follows:
- Inclusion of an explanation of the different levels of disclosure expectations for funds that do not reference ESG factors in their investment objectives but that use ESG strategies, depending on the degree of significance to which the consideration of ESG factors is given in the fund’s investment process, i.e. depending on whether the fund is an ESG Strategy Fund (as defined below) or ESG Limited Consideration Fund (as defined below), as explained below under Types of funds covered in the Notice
- Inclusion of specific guidance for certain types of funds and funds in certain circumstances, including, but not limited to: (a) funds that track the performance of an ESG-related index; (b) funds that invest in underlying funds; (c) funds with carbon offset series; (d) funds that are subject to an IFM’s general proxy voting or engagement approach that addresses ESG matters; and (e) funds managed by IFMs that apply an ESG strategy to more than one of their funds
- Inclusion of a reminder to IFMs about existing requirements relating to written ESG-related policies and procedures
- Clarification of whether certain ESG-related communications are sales communications, and on the use of disclaimers or explanatory language in sales communications.
Any examples provided in this Notice are for illustrative purposes only and are not meant to be exhaustive of all potential s cenarios or approaches.