The Danish Financial Supervisory Authority published a thematic report assessing how financial institutions are complying with requirements to reflect investors’ sustainability preferences in the investment products they are offered. The review, carried out as part of a joint European supervisory activity, finds that institutions have started implementing the requirements but are still at an early stage. Since 2022, firms have been required to identify customers’ sustainability preferences as part of the suitability assessment and to integrate sustainability objectives into product governance. The report highlights challenges linked to the complexity of sustainability concepts for advisers and customers, and notes that differing firm approaches and methods for integrating and measuring sustainability can add to customer confusion. The authority emphasises that preferences should be elicited in an easily understandable, neutral and unbiased way without promoting particular products; the requirements apply to banks, mortgage credit institutions, investment firms, investment management companies and alternative investment fund managers with a top-up authorisation, and are grounded in Danish executive orders on investor protection and product approval procedures and in Commission Delegated Regulation (EU) 2017/565.
Danish Finanstilsynet 2025-06-19
Danish Financial Supervisory Authority review finds institutions still early in integrating sustainability into suitability assessments and product governance
The Danish Financial Supervisory Authority's report on financial institutions' compliance with integrating investors' sustainability preferences highlights challenges due to complex concepts and varying approaches. Clear, unbiased communication is needed for banks, mortgage credit institutions, and investment firms under Danish and EU regulations.