Danish Finanstilsynet finds PAI statements lack measurable actions and are often hard to locate

Danish Finanstilsynet published a review of financial firms’ principal adverse impact (PAI) statements for 2024, finding that disclosures are generally satisfactory but frequently lack concrete, measurable measures and can be difficult for users to find on firms’ websites. The review covered 15 financial firms, including credit institutions, pension companies and investment management companies. All used the legally required template and the firms generally consider the most important adverse impacts on sustainability factors in investment decisions. Measures to reduce climate and environmental impacts are typically described more clearly than measures addressing social indicators, and improvements are needed in both areas. Finanstilsynet emphasised that firms should specify measurable measures or targets for each PAI indicator, clearly state where no measures or targets have been set, and only combine indicators where this does not reduce transparency. The review also points to persistent data challenges, particularly on biodiversity, emissions to water, waste and social conditions, and notes that some statements do not explain efforts to obtain data or identify alternative sources. Finanstilsynet expects firms to act on the recommendations ahead of the next reporting cycle. It also noted that the European Commission intends to propose revisions to the Sustainable Finance Disclosure Regulation, but that any changes may take time to apply and the findings should be read against the current rules.