1. have terms, such as ‘Environment', ‘Social', ‘ESG', ‘Green', ‘Sustainability' or any combination thereof or similar terms, incorporated in their names, or
2. represent or market themselves as ESG focused schemes.
Name of the Scheme: The name of an ESG scheme should be reflective of its ESG focus and consistent with its ESG-related investment objectives and investment strategy.
Investment Objective: FME should transparently disclose the nature and extent of the scheme's ESG-related investment objectives, including details of the primary components of sustainability addressed by the scheme
Investment Strategy: Detailed explanation of type of investment strategy, including ESG-related investment strategy, that FME intends to pursue which amongst others may be towards Integration, Impact Investing, Engagement, Transition for hard-to-abate and other emission-intensive sectors, etc.
Investment Processes: FME shall disclose the methodology for processes deemed relevant for ESG investments (specifically towards initial investments, monitoring, engagement and exits).
Risks and Risk Management Practices: FME managing an ESG scheme should disclose all the specific risks that arise on account of the scheme's pursuit of ESG-related investment objectives, related investment strategies and processes in addition to all the other material risks faced by the scheme.
Benchmark: Wherever feasible, FME may designate a reference benchmark for the ESG scheme to measure the attainment of its ESG focus and/or financial performance vis-à-vis the benchmark.
Periodic Disclosures for ESG Schemes: For every ESG scheme launched by a FME, it shall disclose to the Authority and investors, on a half-yearly basis for a retail scheme and on annual basis for other types of schemes, the compliance with the stated ESG-related investment objectives of the scheme, ESG-related performance, actual proportion of the investable corpus / assets under management invested as per the stated ESG-related investment objectives, Key findings/Major observations of Internal audits or third-party validation, if any, etc.
Monitoring and Compliance: The FME should undertake, on a half-yearly basis for a retail scheme and on annual basis for other types of schemes, assessment of their compliance with the stated ESG-related investment objectives of the schemes, measurement of the ESG-related performance of the scheme by evaluating any pre-determined KPIs, expected outcomes and other relevant factor and submit a declaration.