The revision of the doctrine of the Financial Markets Authority (AMF), implemented in position-recommendation DOC-2020-03 modified in December 2024, marks a decisive step for the responsible finance sector in France. Intended to harmonize national practices with European guidelines, in particular those of ESMA (European Securities and Markets Authority), this update imposes stricter regulation of investment funds claiming environmental, social and governance criteria ( ESG).
Specific requirements for ESG funds
From now on, funds claiming an ESG commitment will have to meet detailed and verifiable requirements. Approaches described as central, where ESG is a key element of communication, require the display of measurable objectives. For example, a fund must demonstrate a significant improvement of at least 20% in the average ESG rating of its portfolio compared to an investment universe. In addition, at least 90% of a fund's assets must be subject to an ESG rating, ensuring almost full coverage.
The AMF, in its new doctrine updated on January 2, 2024, also requires that commercial documents faithfully reflect the commitments described in prospectuses and regulatory documents. Any inconsistency between the ESG promises and the real constraints of the fund will be sanctioned, with the aim of limiting marketing abuses linked to greenwashing. Additionally, educational warnings about the methodological limitations of ESG strategies will now need to be included in communications. Foreign funds marketed in France will also have to comply with these rules, highlighting the growing influence of French regulation on the European market.
Reliable data at the center of ESG
This reform is not without consequences for management companies. They must invest in robust methodologies and strengthen their partnerships with reliable ESG data providers. These costly adjustments will make it possible to meet the expectations of institutional and individual investors, who are increasingly demanding in terms of sustainable finance. For companies seeking to capture responsible capital flows, these new standards represent an opportunity to improve their credibility and attract customers aware of ESG issues.
For policymakers, this development highlights the need to rethink ESG strategies as concrete commitments, supported by robust metrics and verifiable results. Funds with recognized labels, such as the SRI (Socially Responsible Investment) label, will be particularly well placed to differentiate themselves in a market seeking transparency. Conversely, those that fail to adapt risk not only regulatory sanctions, but also a loss of investor confidence.
Finally, this reform strengthens France's place as a key player in the regulation of sustainable finance in Europe. It aligns with the orientations of the SFDR regulation and the ESMA guidelines, while imposing specific standards adapted to the French context.
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