The European Securities and Markets Authority (ESMA) has issued two new thematic notes on sustainability-related claims, adding to its growing body of guidance on how market participants describe environmental credentials to investors.

The notes form part of ESMA's ongoing supervision of sustainability-related disclosures across the European Union. They address the risk that firms overstate or blur their environmental performance in investor-facing materials — a practice regulators across the bloc have labelled greenwashing.

Why do thematic notes matter?

ESMA publishes thematic notes to summarise findings from its supervisory work and to signal where it expects firms and national competent authorities to focus. For asset managers, issuers and listed companies, the notes function as informal but weighty guidance. They indicate the areas where the regulator considers misleading claims most likely to arise and where enforcement attention may follow.

Sustainability-related claims have drawn sustained scrutiny since the EU introduced its sustainable finance framework, including the Sustainable Finance Disclosure Regulation and the Taxonomy Regulation. ESMA, together with national regulators, has repeatedly warned that gaps between marketed sustainability credentials and actual portfolio or operational performance expose firms to supervisory action.

What does this mean for circular-economy claims?

For companies in the recycling and secondary-materials sector, the relevance is direct. Recycling rates, recovered-content percentages and circularity pledges now appear in prospectuses, fund documentation and corporate reporting. Each such figure is a sustainability-related claim in the sense ESMA addresses, and each carries evidentiary obligations.

The two notes arrive as EU authorities tighten the framework around environmental marketing more broadly. The EU Green Claims Directive, still in the legislative process, would extend substantiation requirements to explicit environmental claims made to consumers. Financial-market claims already face a stricter regime.

What happens next?

The immediate milestone is implementation by national competent authorities, which apply ESMA's guidance in day-to-day supervision. Firms that publish sustainability claims without documented substantiation should expect closer questioning in supervisory dialogue. Further output from ESMA on greenwashing, and the final form of the Green Claims Directive, will determine how far these evidentiary duties harden into formal enforcement.

By Rebecca Stone