As the SFDR debate continues to rage in Norway, the Consumer Authority Forbrukertilsynet has been considering the use of disclosure regulation terms in marketing.

Tonje H. Drevland, head of the inspection department at Forbrukertilsynet, highlights that the SFDR has not yet come into force in Norway.

”Forbrukertilsynet would therefore like to emphasize that the current rules for marketing funds as sustainable are still applicable,” says Drevland, adding:

”We can see that individual funds are currently being marketed with claims of being ’sustainable’ funds. This is deeply problematic when considered in light of the regulations, where a lot needs to be done to market funds, or any other product, as sustainable, without being able to provide extensive and explanatory documentation for this.”

”To ensure products marketed as sustainable are not breaking the law, the manager must be able to document that the product has no, or essentially no, negative impact on the environment or social conditions,” she states.

In practice, it is almost impossible to document this, says Drevland, meaning that it is essentially illegal to market funds as ”sustainable.”

Once the EU’s Sustainable Finance Disclosure Regulation has come into force in Norway, it is the Norwegian FSA (Finanstilsynet) that will be responsible for enforcing SFDR and the taxonomy, when that is complete and gone into force as well. The consumer council will continue to monitor the marketing of funds.

”As soon as Forbrukertilsynet has made a final decision on what consequences the taxonomy and SFDR will have for marketing funds to consumers, we will release guidance for business leaders,” Drevland says.

Not about marketing

”Our current assessment is that when SFDR comes into force, it will not really entail changes to the strict limitations on the use of the word ’sustainable’ entailed in current marketing legislation,” she says, adding that SFDR applies to information disclosure, not marketing.

”SFDR does introduce requirements that players must ensure their marketing is consistent with the information reported about the products in line with the disclosure regulation, which is an additional requirement to marketing legislation. SFDR means that the EU financial authorities can propose marketing laws, but laws like this have not yet been suggested,” Drevland states.

The department head also says that it is the taxonomy, not the SFDR, which may lead to a change in whether managers can call their funds ”sustainable.”

As this regulation has not yet come into force in Norway, Forbrukertilsynet is in a phase where it considers the consequences of the taxonomy in connection with the strict requirements of marketing legislation. It is about regulation, and ensuring consistency across EU countries,” she says.

”We are therefore in the process of clarifying our standpoint, alongside other EU countries, as well as collecting information about how consumer protection organizations in other countries are putting the regulations into practice, ” Drevland explains.

(This article was provided by our Norwegian sister media, FinansWatch.no)

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