The Financial Supervisory Authority of Norway (Finanstilsynet) submitted feedback to the European Commission’s call for evidence on revising the Sustainable Finance Disclosure Regulation (SFDR), supporting the regulation’s transparency goals but calling for simplification to cut firms’ operational and compliance costs while keeping disclosures focused on products’ actual ESG impact. It positions the changes as a way to reduce greenwashing risk, particularly in marketing of financial products. Based on two supervisory activities covering 55 financial market participants and 40 financial advisers, Finanstilsynet identifies confusion in current SFDR concepts, notably between “inside-out” sustainability impact and “outside-in” sustainability risk, and between entity-level and product-level obligations. Its proposals include removing the concept of sustainability risk from SFDR, citing that related risk-management requirements already exist in sectoral rules such as the UCITS Directive, the Alternative Investment Fund Managers Directive and MiFID II, and eliminating entity-level requirements by consolidating disclosures at product level. It also proposes removing the requirement to justify a decision not to consider principal adverse impacts and suggests considering a mandatory product-level principal adverse impact template to improve comparability. Norwegian stakeholders can still submit input through the European Commission consultation portal until 30 May.
Norwegian Finanstilsynet 2025-05-28
The Financial Supervisory Authority of Norway proposes SFDR simplification by consolidating disclosures at product level and removing sustainability risk
Norway's Financial Supervisory Authority (Finanstilsynet) has advised the European Commission on revising the SFDR, advocating simplification to cut firms' costs while ensuring ESG transparency. They suggest removing sustainability risk, consolidating product-level disclosures, and introducing a mandatory adverse impact template to reduce greenwashing and enhance comparability in financial product marketing.