Stockholm (NordSIP) – In a new report into the application of the Sustainable Finance Disclosure Regulation (SFDR), the Dutch Authority for the Financial Markets (AFM) found that disclosures by Dutch funds about sustainability risks and sustainability characteristics is often too general.
The AFM report covers the application of SFDR, particularly the compliance with Articles 6, 8, and 9 of the regulation, by 100 managers of 1,250 Dutch funds. According to the research, 57% of the 1250 Dutch funds have no sustainable characteristics (Article 6). Another 35% of the (sub)funds are qualified by fund managers as a fund with ‘sustainable (ecological or social) characteristics’ (Article 8) and 8% reported that they have ‘sustainable investments’ as their goal (Article 9).
Considering whether the Article 9 designation was appropriate for 46 of the funds so categorise, the AFM found the description to be “only partly the case”. The ‘sustainable funds’ examined have included information on sustainability risks in the prospectus, but in many cases, the AFM concluded it was too general and lacking in depth. The Dutch market authority noted the absence of a concrete description of the ‘sustainable objective’ or of the ecological or social characteristics that the fund wants to promote.
The AFM expects the market, together with the lessons learned from the report, to lead to more specific information for investors in the near future and will continue to monitor SFDR implementation closely.