Financial Supervisory Authority of Norway identifies misleading sustainability score marketing and SFDR disclosure issues at Storebrand Asset Management

The Financial Supervisory Authority of Norway published an inspection report on Storebrand Asset Management AS as part of a document-based thematic review of eight fund managers’ compliance with sustainability-related disclosure requirements under Regulation (EU) 2019/2088 (SFDR). The supervisor concluded that the firm’s website presentation of its proprietary “Storebrand sustainability score” was liable to mislead customers and that wording in required sustainability documentation could give the impression that sustainability risk forms part of the assessment of whether investments are “sustainable” or funds have sustainability characteristics. The sustainability rating shown in the website fund overview was based on an internal score in which sustainability risk accounted for about 50%, without clearly explaining that a substantial part of the metric related to the risk of sustainability events negatively affecting returns. The authority also reviewed disclosures for one Article 8 fund and one Article 9 fund and found formulations suggesting that sustainability risk was weighed into sustainability qualification and that an Article 9 fund could, in some situations, hold “non-sustainable” investments due to insufficient data. Storebrand stated that neither sustainability risk nor the internal score is used to qualify investments as sustainable, removed the sustainability score from commercial webpages and marketing, and deleted the wording allowing for non-sustainable investments due to data gaps, while also initiating a broader review of fund documentation; the authority requested that a copy of the report be sent to the auditor and the depositary.