---
title: "Test a fund’s ESG screens and exclusions against its holdings"
url: "https://ailawframework.com/practice/climate-esg-and-sustainability-reporting/test-a-fund-s-esg-screens-and-exclusions-against-its-holdings"
type: "task"
site: "AI Law Framework"
id: "A48-D20261018-1"
practice_area: "Climate, ESG & Sustainability Reporting"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Test a fund’s ESG screens and exclusions against its holdings

> Extract every screen, exclusion and sustainability representation from the fund’s disclosure documents, website and marketing, then compare each with the holdings file and the issuers’ sector and revenue data, listing…

Canonical page: https://ailawframework.com/practice/climate-esg-and-sustainability-reporting/test-a-fund-s-esg-screens-and-exclusions-against-its-holdings  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Climate, ESG & Sustainability Reporting](https://ailawframework.com/practice/climate-esg-and-sustainability-reporting.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Extract every screen, exclusion and sustainability representation from the fund’s disclosure documents, website and marketing, then compare each with the holdings file and the issuers’ sector and revenue data, listing every holding that appears to fall inside a stated exclusion with the representation and the data point cited. |
| What the lawyer must review | The lawyer decides whether each flagged holding actually breaches the representation as an investor would read it, whether any threshold or exception in the documents applies, what the fund must change (the holding, the wording or both), and whether past statements need correcting. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Line-by-line review**

Review the complete output at the level of each line, paragraph or clause; check facts, meaning and omissions.

- What the AI does: Extract every screen, exclusion and sustainability representation from the fund’s disclosure documents, website and marketing, then compare each with the holdings file and the issuers’ sector and revenue data, listing every holding that appears to fall inside a stated exclusion with the representation and the data point cited.
- What the lawyer does: The lawyer decides whether each flagged holding actually breaches the representation as an investor would read it, whether any threshold or exception in the documents applies, what the fund must change (the holding, the wording or both), and whether past statements need correcting.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. Check every representation is captured, including website, marketing and media statements, not only the disclosure document.
2. Confirm the holdings file and the sector data are as at the same date.
3. Check each flagged holding against the issuer’s own reporting before treating it as a breach.

## Notes

- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [ASIC INFO 271 — How to avoid greenwashing when offering or promoting sustainability-related products](https://www.asic.gov.au/regulatory-resources/financial-services/how-to-avoid-greenwashing-when-offering-or-promoting-sustainability-related-products) (checked 2026-10-18)
- [ASIC 25-042MR — Active Super ordered to pay $10.5 million penalty in ASIC’s third greenwashing court action](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-042mr-active-super-ordered-to-pay-105-million-penalty-in-asic-s-third-greenwashing-court-action) (checked 2026-10-18)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/climate-esg-and-sustainability-reporting/test-a-fund-s-esg-screens-and-exclusions-against-its-holdings/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*