The European Securities and Markets Authority (ESMA) has published two new thematic notes on climate transition and impact claims. While they don't create any new rules, they do give supervisors a catalogue of good and poor practice drawn from real market communications. Regulators now have a ready-made reference for judging whether claims made by asset managers, and benchmark administrators are clear, fair and not misleading.

For stewardship teams, the most important passage is not about product labels. Among ESMA's examples of poor practice is a fund that claims to generate "real world positive impact" through engagement, while reporting only generic ESG engagement topics such as proxy voting across part of its portfolio, with no clear objectives, milestones or demonstrated outcomes. The same fund takes full credit for a company's progress without acknowledging that other investors were also engaging. That is vote washing in all but name – and the regulator has now written it down.

From stewardship ambitions to evidence-based sustainability claims

Both notes apply four principles: sustainability claims should be accurate, accessible, substantiated and up to date. ESMA also sets out how claims become misleading – through cherry-picking, exaggeration, omission, vagueness, inconsistency, or the absence of meaningful comparisons and thresholds.

Transition claims attract particular scrutiny because they are forward-looking. Firms are expected to explain what a transition objective involves, how it will be delivered, which assumptions and dependencies underpin it and how progress will be measured. Impact claims must set out what difference the investor expects to make, how it will be achieved and how results will be measured. ESMA specifically cautions against referring to impact-motivated engagement without explaining how it differs from standard ESG engagement.

Crucially, the notes address marketing materials and voluntary communications, not just formal disclosures. Stewardship reports, engagement case studies, voting rationales and net zero alignment statements all fall within that territory.

EU greenwashing enforcement is moving from guidance to action

ESMA's notes are the latest turn of a ratchet that national enforcers are also tightening. Since 27 September 2026, Belgium and Denmark have applied national rules transposing the EU’s Empowering Consumers for the Green Transition Directive, including a prohibition on generic environmental claims where the trader cannot demonstrate recognised excellent environmental performance relevant to the claim.

In Belgium, authorities no longer need to show that a consumer was actually misled. The Netherlands moved earlier still, applying the rules from 16 July 2026, and the AFM has warned banks, insurers and investment firms that the prohibitions apply to their sustainability claims too.

The Dutch regulator has also intensified its focus on sustainability communications, concluding in a review of 43 claims by financial institutions that many were insufficiently specific and identifying anti-greenwashing supervision as a priority for 2026. The findings suggest regulators increasingly expect firms to support sustainability statements with clear, verifiable evidence rather than broad marketing language. The enforcement framework can allow penalties of at least 4% of annual turnover in the member state(s) concerned in certain coordinated cross-border cases.

In Denmark, the financial supervisor Finanstilsynet reportedly ordered pension fund P+ to amend elements of its "green" pension product after finding that some environmental assessments relied on companies' emissions-reduction targets rather than demonstrated outcomes. The regulator also identified shortcomings in sector coverage and governance criteria, highlighting increasing supervisory scrutiny of how sustainability methodologies are constructed and evidenced.

In France, enforcement action is also advancing. In September 2026, the Autorité des marchés financiers (AMF) reportedly sought €1.5m in sanctions against asset manager Auris Gestion and two executives over a range of alleged failings, including practices relating to funds marketed as sustainable, underscoring regulators' willingness to pursue greenwashing-related cases through formal enforcement channels. A decision on the case from the authority’s Enforcement Committee is expected on 24 November.

Germany's BaFin is taking a similar approach. Having previously warned that greenwashing threatens confidence in sustainable finance, the regulator's 2026 supervisory priorities include intensified efforts to prevent misleading sustainability claims, including checks on whether ESG-labelled investment products are meeting their stated commitments.

The scope of risk is also widening. According to a recent report from RepRisk, biodiversity has overtaken climate change and greenhouse gas emissions as the leading environmental topic associated with greenwashing allegations, with risk increasingly extending to ecosystems, land use and other environmental impacts. Nature-related engagement claims are likely to be next in line for scrutiny.

As Minerva Analytics reported earlier this year, ESMA had already called on firms to define ESG integration and exclusion strategies clearly, substantiate sustainability claims and disclose the criteria and thresholds behind them. The latest notes extend that logic to transition and impact narratives – and, by implication, to the stewardship activity many firms cite as evidence for both.

What ESMA's greenwashing means for stewardship teams

Stewardship teams sit on both sides of these notes.

As users, they gain a framework for testing corporate transition plans. The questions ESMA expects financial firms to answer – what is the objective, what assumptions underpin it, what are the milestones and dependencies – are the same questions investors should put to companies in engagement and when voting on transition plans and Say on Climate resolutions.

As subjects, their own claims face the same test. Teams should ask:

• Could every engagement outcome in our stewardship report be evidenced with objectives, milestones and a documented change at the company?

• Where engagement was collaborative, does our reporting acknowledge the contribution of others?

• If we describe voting as "net zero aligned" or engagement as delivering "impact", can we explain what distinguishes it from standard ESG stewardship?

• Are escalation claims backed by a documented protocol and a record of when it was applied?

• Are limitations, data gaps and dependencies disclosed alongside successes?

None of this is new in principle. It reinforces the outcomes focus of the UK Stewardship Code and the engagement policy disclosures required under the Shareholder Rights Directive II. What has changed is that a regulator has now published worked examples of what falling short looks like.

What comes next for stewardship and greenwashing scrutiny?

Thematic notes do not carry penalties in their own right. But they set the reference point supervisors will use when reviewing communications, and the gap between current market practice and ESMA's examples is now on the record. Firms that describe their stewardship in terms of impact, alignment or influence should assume those claims will be read against that standard – by regulators, by clients and by campaigners.

The strength of a stewardship claim will increasingly depend not on what it promises, but on what it can prove.