Stockholm (NordSIP) – Regulators and supervisors worldwide are ramping up their efforts to curb greenwashing in the financial sector and increase asset managers’ accountability. The EU is at the forefront of the movement, with the European Securities and Markets Authority (ESMA) encouraging supervisors in EU Member States to strive for a broader consensus on this issue.
The Swedish Financial Supervisory Authority, Finansinspektionen (FI), has certainly been taking note. Last year, FI conducted an in-depth analysis of how managers of Article 9 funds registered in Sweden meet the requirements on sustainability-related disclosures in the pre-contractual information they must provide to investors. In short, the supervisory authority observed that there was room for improvement.
Now, it is time to broaden the scope of the investigation and review how Swedish fund managers, in general, comply with the EU’s sustainability regulation. On 8 September, FI announced (in Swedish) that it would be launching a new in-depth analysis into the topic. “We will examine how fund management companies and alternative investment fund managers (AIFMs) that market funds to retail investors comply with the rules concerning the integration of sustainability risks, sustainability-related disclosures and greenwashing risks,” writes FI in a press release.
According to the supervisors, the analysis will be divided into two parts, with the initial phase focusing exclusively on greenwashing risks. “We have identified some prioritised areas, and preventing the risk of greenwashing in the financial sector is one of them,” comments Johanna Fager Wettergren, Head of Sustainable Finance at FI. “Also, the conclusions from the questions on greenwashing in the survey will be included in the final ESMA report, expected to be published in May 2024,” she adds, confirming that the review is part of a joint activity conducted by supervisory authorities in EU member states.
According to the press release, FI has chosen to review seven fund managers in particular. “In this analysis, we focus on consumer protection; hence, we have targeted retail funds,” explains Fager Wettergren. “Within that scope, we chose to select funds differing in size, strategy, and ownership structure. This means our review will cover funds with different legal obligations, which we believe will be of value when analysing the results.”
The newly launched review is not the only sustainability-related investigation that FI is currently leading. “As part of an in-depth analysis, FI is also conducting a review of whether financial firms’ sustainability reports comply with the requirements of the EU Taxonomy Regulation,” says Fager Wettergren, pointing out that this, too, is part of FI’s efforts to counteract greenwashing. “The Taxonomy is an important tool for accounting and disclosure by companies. Investors and consumers need good access to relevant, comparable and reliable sustainability-related information to make sustainable investments.”