The Dutch Authority for the Financial Markets (AFM) has published its first ESG update, setting supervisory priorities for 2025 and 2026 to improve the reliability of sustainability information and ensure that sustainable products are appropriate for consumers, investors and pension participants. While noting progress over the past year, the AFM signals that more work is needed, including on compliance with requirements that have been in force for some time, and it expects firms to improve versus last year and may take action against laggards where results are insufficient. The update focuses on four areas. Sustainability claims in marketing and other communications should be correct, clear and not misleading and, for pensions, balanced, with firms expected to follow the AFM’s sustainability claims guidance and avoid making claims they cannot substantiate. Under the Sustainable Finance Disclosure Regulation (SFDR), firms should publish all required disclosures on their websites in a way that is clear and easy to find, and ensure SFDR information is reliable, including on products’ sustainability characteristics, sustainability risks and adverse impacts. For product oversight and governance (POG), the AFM expects sustainability requirements to be embedded in POG policies, product offerings to be assessed accordingly, and controls to prevent products without sustainability features being sold to clients seeking sustainable investing, including monitoring distribution of “grey products” to the negative target market. For suitability assessments, firms should clearly explain the sustainability element, carefully capture clients’ actual sustainability preferences without steering them toward particular products or strategies, and provide products that match those initial preferences rather than prompting preference changes. The AFM expects to publish a further ESG update in the autumn, with future updates zooming in on specific sustainability legislation themes for consumers and, where possible, drawing on recent research data referenced in its Agenda 2025.

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