ESMA examines impact of sustainable suitability rules

By James Langton | June 16, 2023 | Last updated on June 16, 2023
1 min read
EU flags waving in front of European Parliament building. Brussels, Belgium
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The European Securities and Markets Authority (ESMA) is launching a review of the effects of rule changes that aim to integrate sustainability considerations into suitability assessments and product governance requirements.

As part of the consultation, the regulator for the European Union is seeking industry feedback on how the recent regulatory efforts to incorporate sustainability-related requirements for investment firms are being implemented, and the compliance challenges that firms are facing.

For instance, changes to rules on suitability assessments that added sustainability factors, risk and preferences took effect in August 2022.

Now, ESMA is seeking to understand how the market has evolved under the new requirements, and “the investor experience and reactions to the inclusion of sustainability factors in investment advice and portfolio management services.”

It’s also seeking data on the trends in the retail market for sustainable investment products and services, since the rule changes to took effect.

ESMA said that the review is intended to complement its other work on sustainable investment, such as its efforts to combat greenwashing, and that it isn’t proposing any changes to the suitability rules, or product governance requirements just yet.

Instead, the ongoing work to assess the results of these reforms will inform any future changes to its rules or guidance in this area.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.