Stockholm (NordSIP) – As we embark on yet another year, NordSIP took the occasion to reach out to the Danish, Swedish and Finnish Financial Supervisory Authorities (FSAs) to hear what their agenda for 2022 looked like and take their temperature on the main challenges facing the industry.
Concerns about data, definitions, regulations and, above all, greenwashing were common themes among the supervisors.
Finanstilsynet To Keep Supervisory Pressure Against Greenwashing
“In the area of sustainable finance, our work is centred around three main tasks,” says Theodor Joachim Christensen, Deputy Director Capital Market Regulations and Head of the Unit for Sustainable Finance at Finanstilsynet, Denmark’s FSAs.
The first focus of the Danish FSA will be to contribute to the ongoing development of EU regulation in the field of sustainable finance. Second, Finanstilsynet will supervise the compliance with existing legislation. Finally, it will inform relevant parties on the new regulation and setting supervisory expectations around how the requirements are met.

“In 2021 the Danish FSA prioritized providing information and guidance in order to raise awareness of the new regulation and ensuring decent implementation in the financial sector,” Christensen explains. “n 2022 we will devote more resources to actually supervising compliance with the various pieces of sustainable finance legislation. More specifically, we will increasingly focus on supervising the implementation of the EU Disclosure Regulation and initiate supervision of the EU Taxonomy Regulation,” Christensen adds.
For Christensen, the main challenges facing sustainable investments are the data difficulties faced by investors, as well as greenwashing. “Obviously, there are still challenges around the familiar themes of data and measurement difficulties, which harm sustainable investment and investor protection, since the lack of standards and transparency imply a risk of greenwashing. This also extends to problems in the sphere of ESG ratings that are not aligned on definitions and measurement methods or fully capture the specific requirements from new EU regulation,” he argues.
“Increasingly, however, we are also concerned about sustainable investment products being promoted as much more sustainable than they actually are. There has been a huge surge in the labelling of article 8 and 9 financial products, but from a retail investor perspective, it is very difficult – close to impossible – to distinguish the products from each other and gauge which is more or less sustainable. There is a significant risk that the various levels of sustainability become blurred and that investors will sour on the whole concept of sustainable investments because of a perception that financial companies are not owning up to their sustainability claims,” Christensen warns.
Finansinspektionen to Take Three-Prongued Approach
The Swedish FSA has a similar approach to its Danish counterpart. “Finansinspektionen will have three main priorities for sustainable finance in 2022: New regulations, supervisory activities and global cooperation,” says Johanna Fager Wettergren, Head of Sustainable Finance at Finansinspektionen, the Swedish FSA.

“Firstly, as new EU regulations entering into force will have major impact, our main focus will be on ensuring that firms are working actively to adapt to the new requirements. We will be in close dialogue with market participants and other stakeholders. Secondly, supervision is one of the most important tools that FI has for carrying out its assignment. To the greatest extent possible it will be risk-based. For 2022 we will focus on two risks; greenwashing and transition risk. Thirdly, global challenges requires global solutions. For that reason Finansinspektionen has taken an active role in the global cooperation on sustainable finance. One outcome will be a new global climate standard, expected to become a reality during 2022. This will be a game-changer,” she explains.
Discussing the are the main challenges facing sustainable investments, Wettergren ints the finger at the lack of definitions and rapidly evolving regulations. “I think everyone can agree that the absence of common definition of green finance and lack of international standards is one of the main challenges facing sustainable investments. Also, and as a consequence, there is a profound disconnect between the ESG data investors need and what’s available to them. Though, I am quite optimistic we will be able to improve the quantity, quality and comparability of climate-related disclosures by implementing common frameworks,” she says.
“Other challenges facing investors has to do with the fast development and the rapidly changing regulatory landscape. Investors have to develop new skills and expertise to be able to actively adapt to new regulations. Putting in place a comprehensive approach to ESG issues and a way to embed these new risks within their existing enterprise risk-frameworks is crucial,” Wettergren adds.
Finland Fights Greenwashing
According to Nina Männynmäki, Market Supervisor at Finanssivalvonta, Finland’s FSA, the Finnish supervision of sustainable finance in 2022 will focus on the topics related to entities risk management and greenwashing in its.

“Sustainability risks have to be incorporated into the supervised entities’ business strategies and risk management,” Männynmäki explains. “A wide choice of new products coming available in the market and growing investor demand might create room for mis-selling of ESG-labelled products. It is important to ensure that retail investors have access to adequate and understandable information on the greenness of investments while trying to prevent potential greenwashing,” she adds.
Männynmäki argues that sustainable finance regulation remains a challenge, in no small part due to the fact that is still incomplete. “Supervised entities will be expected to comply with level 2 disclosure requirements under SFDR and TR in the very short preparing period. Also, the need for high-quality sustainable data and high-quality standards for corporate sustainability reporting is a challenge for all in the area of sustainable finance markets,” she concludes.