With its latest thematic note on impact claims, ESMA provides practical guidance on how firms should communicate impact in a way that is clear, fair and not misleading. The note focuses on the following question: what exactly do firms mean when they claim to create impact?
ESMA highlights three concepts that should underpin impact claims: intentionality, additionality and measurability. A new distinction is also stressed: investee impact and investor impact. While investee impact refers to the positive outcomes generated by a company or project, investor impact relates to the contribution made by the investor. The two should not be confused.
The timing is notable. Impact claims are attracting increasing regulatory attention across Europe. The EU's EmpCo Directive is now in force, and the proposed SFDR 2.0 framework points in the same direction: firms are expected to explain and substantiate sustainability-related claims. In particular, the proposed impact category under SFDR 2.0 would require products using impact terminology to define a measurable objective and an impact rationale. ESMA's note provides a useful indication of what regulators are likely to expect going forward.
Key expectations
For funds, ESMA expects firms to explain whether they target investee impact, investor impact or both. If a fund claims to generate impact, there should be a clear explanation of how impact considerations influence investment decisions and how results are measured. ESMA also makes clear that holding listed securities does not, by itself, amount to investor impact.
For bonds, impact claims should be consistent with the issuer's overall sustainability strategy and supported by transparent reporting. Issuers should be able to explain how financed activities or sustainability targets contribute to the claimed impact and continue to report against those commitments after issuance.
Across both funds and bonds, ESMA emphasises that products should not be labelled as "impact" solely because of their asset class, sector focus or the use of exclusions. Impact claims should be supported by a credible rationale, clear methodologies and transparent reporting.
Why this matters
Many firms already publish impact reports, sustainability reports and marketing materials that refer to positive environmental or social outcomes. The challenge is ensuring that these claims are consistent, adequately evidenced and aligned with the way the product actually operates.
ESMA notes that sustainability claims can be misleading even where there is no intention to mislead. For that reason, all claims should be accurate, accessible, substantiated and up to date.
For firms reviewing their sustainability strategies and communication, the message is straightforward: be clear about what type of impact is being claimed, explain how it is achieved and make sure the supporting evidence is available.
How PwC Switzerland can help
We help asset managers, banks and issuers assess whether their impact-related communications are aligned with ESMA's expectations, the EmpCo rules and upcoming SFDR 2.0 developments. Our support includes:
- Product red flag reviews including impact claims health checks
- Impact framework and KPI design
- SFDR 2.0 readiness assessments
- Bond framework and reporting reviews
- Aligning EU and Swiss (self-regulation) frameworks
By identifying gaps early, firms can strengthen the credibility of their impact claims and reduce greenwashing risks.
Contact us
Partner, Sustainability & Strategic Regulatory, PwC Switzerland
Dr. Antonios Koumbarakis verantwortet den Bereich Nachhaltigkeit & ESG und ist auf strategische Regulation und Compliance von Vermögensverwaltungen, Finanzinstitutionen spezialisiert. Er leitete Projekte für zahlreiche nationale und internationale Kunden und unterstützt diese bei der Erreichung ihrer hohen Nachhaltigkeitsziele sowie bei der Einhaltung der regulatorischen Vorgaben.
Sofia Jaccard
Senior Manager, Sustainability & Strategic Regulatory, PwC Switzerland
Rahel Blumer
Senior Manager, Sustainability & Strategic Regulatory, PwC Switzerland
