The EU’s financial and environmental watchdogs have signed a cooperation deal aimed at tightening oversight of sustainable finance and tackling the risk of greenwashing.
The European Securities and Markets Authority (ESMA) and the European Environment Agency (EEA) agreed a Memorandum of Understanding (MoU) in July and August, setting out how the two bodies will share expertise, data and resources.
The deal focuses on bringing environmental information more directly into the EU’s sustainable finance framework, which governs how financial products can be labelled and supervised when marketed as “green” or “sustainable.”
Why it matters
Sustainable finance has grown rapidly in Europe, but regulators have warned of inconsistent reporting and misleading claims. In June 2024, ESMA published a major report on greenwashing, highlighting gaps in supervision and calling for stronger links with the EEA, which collects environmental data across Europe.
ESMA Chair Verena Ross said the agreement would help ensure “the integrity of ESG markets” and allow supervisors to act more effectively against misleading claims.
The EEA’s Executive Director, Leena Ylä-Mononen, added that environmental evidence would play a bigger role in assessing the impact of financial products.
What’s in the deal
The MoU outlines cooperation in four main areas:
- Sharing non-public data and technical expertise
- Joint training and capacity-building
- Coordination between national financial and environmental authorities
- Participation in EU and international policy discussions
The agreement will last four years, after which it will be automatically extended unless either side objects.
A wider push
The deal forms part of ESMA’s 2023–2028 strategy, which places sustainable finance at the centre of its work, alongside a pledge to prevent greenwashing. For the EEA, the cooperation reflects its 2021–2030 strategy of building stronger partnerships to provide comparable and reliable environmental data.
