Financial Supervisory Authority of Norway identifies misleading sustainability marketing and disclosure weaknesses in thematic review of eight fund managers

The Financial Supervisory Authority of Norway has published findings from a thematic supervisory review of eight fund managers’ compliance with the Sustainable Finance Disclosure Regulation (SFDR), identifying cases where marketing created a misleading impression that funds were sustainable and where firms’ sustainability-risk and impact disclosures were inadequate. Key issues included the misleading presentation of ratings as evidence of contribution to sustainable development when they in fact measured how sustainability could negatively affect returns, and the use of labels, logos or imagery implying sustainability characteristics or objectives where funds did not have them. The review also found missing mandatory product information on firms’ websites, SFDR documents that mixed up sustainability risk with investments’ negative impacts or contribution to sustainability, incomplete and unclear policies for identifying and managing sustainability risks, and insufficient explanations of methodologies for assessing principal adverse impacts, including reliance on external data sources without clarifying how they are used. Individual inspection reports were published for DNB Asset Management, EnvisionTech, Forte Fondsforvaltning, Katapult Ocean, Landkreditt Forvaltning, Njord Alternative Investments, Positron Capital and Storebrand Asset Management, alongside a thematic report that also incorporates results from a survey covering all securities firms and provides guidance where the supervisor sees a need for clarification.