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The European Securities and Markets Authority (ESMA) is elevating the fight against greenwashing as a regulatory priority.

ESMA, the European Union’s financial markets regulator, said it is changing its supervisory priorities, replacing its focus on the cost and performance of retail investment products with greater attention to ESG disclosures, in particular, and sustainable finance overall.

“We will foster transparency and comprehensibility of ESG disclosures across key segments of the sustainable finance value chain such as issuers, investment managers or investment firms, and hence tackle greenwashing,” it said.

Specifically, ESMA said it intends to increase scrutiny on ESG disclosures through “effective and consistent” supervision.

“This also implies building supervisory capabilities to fully embed sustainable finance into daily supervisory work and supervisory culture,” it said.