The Danish Financial Supervisory Authority (Finanstilsynet) published a report bringing together observations from several supervisory reviews of how asset managers and pension companies decide whether an investment can be classified as a “sustainable investment”, finding large differences in firms’ approaches. Financial product providers are required to disclose what share of a product’s investments are “sustainable investments”, and certain product types must also meet requirements to contain only sustainable investments. The reviews showed substantial variation in how providers calculate sustainability in practice, including how they ensure that a sustainable investment does not cause significant harm to environmental or social factors. The report also summarises key requirements in the area and sets out the supervisor’s expectations for firms. The report notes the European Commission’s Omnibus proposal of 26 February 2025 to simplify ESG reporting requirements and states that the Danish Financial Supervisory Authority expects a Commission proposal to revise the Sustainable Finance Disclosure Regulation (SFDR), while emphasising that any changes may take time to apply and that the report should be read in light of current rules.
Danish Finanstilsynet 2025-07-01
Danish Financial Supervisory Authority publishes report highlighting inconsistent methods for classifying sustainable investments
The Danish Financial Supervisory Authority published a report highlighting significant differences in how asset managers and pension companies classify "sustainable investments." It underscores the need for consistent calculation methods and compliance with sustainability requirements, while noting the European Commission's Omnibus proposal to simplify ESG reporting and potential revisions to the Sustainable Finance Disclosure Regulation.