Mutual funds sold in Sweden will soon be obligated to provide information about which sustainability efforts they have launched, at least if the new legislative proposal from Swedish Minister for Financial Markets, Per Bolund from the Green environmental party is passed.

Topics like environment, human rights, social conditions, and corruption must be on full display for all to see how the mutual fund has acted in these situations, writes Swedish media SvD Näringsliv.se.

"And if there are no sustainability efforts to show, that must also be disclosed for consumers to see," says Bolund.

The proposal is intended to help increase transparency and consumer protection, and will only apply to Swedish mutual funds, not foreign funds. The Swedish Financial Supervisory Agency, Finansinspektionen, will prepare templates for comparing Swedish funds to foreign funds.

"Everyone is now forced to be transparent and report how to work with sustainability," says Bolund.

He does not think tightening requirements will scare fund managers out of the Swedish market.

"I think this increases interest in the fund market and that Sweden becomes such a clear model internationally, it will mean that players will seek out the Swedish market," Bolund is quoted saying.

Denmark unlikely to follow Swedish lead

Denmark is not likely to be copying the Swedish legislative proposal any time soon.

A quick telephone call to each of the respective spokespeople on financial affairs of governing Danish parties Venstre and Liberal Alliance, Jacob Jensen and Joakim B. Olsen, indicates that Denmark will not be following the Swedish example during this election period.

"That proposal is completely daft. For politicians to push their personal preferences on mutual funds, I can't endorse that," was the outspoken comment from Joakim B. Olsen from Liberal Allience. He continues: "That's just populism [Referring to ESG criteria, -ed.]."

Venstre's Jacob Jensen says to the idea: "It is a good thing to have different funds, and if the funds feel like it is necessary to have a special sustainability profile, then they are free to do so. Many do it, but it should be up to demand and as such up to the mutual funds whether it should appear from their profile."

Spokesperson on financial affairs from opposition party Alternativet, Josephine Fock, sees the situation quite differently:

"I think it sounds very, very interesting, and I will research this in case we might want to propose something similar. I see it as a step in the right direction. We need to accelerate the process of sustainable transition, and that goes for the financial sector as wel. Sweden is far ahead of us," says Fock.

English Edit: Marie Honoré