Supervision release 24 April 2024 – 14/2024

Thematic review: Greenwashing risk taken into account in a relatively limited manner in investment fund activities

The Financial Supervisory Authority (FIN-FSA) is conducting a thematic review in 2023–2024 about the consideration of sustainability risks in UCITS and non-UCITS funds (hereinafter also “investment funds”) and their sustainability disclosures. The objective of the thematic review is to assess companies’ adherence to applicable regulation concerning sustainable finance, collect further information on greenwashing risks related to investment funds, and identify further relevant supervisory and regulatory intervention to address greenwashing risk.  

The thematic review assesses all Finnish management companies and Alternative Investment Fund Managers managing non-UCITS funds, and how greenwashing risks and sustainability risks are taken into account in investment funds managed by them. In addition, the FIN-FSA sent a more extensive survey on the same theme to eight companies. The thematic review is part of a Common Supervisory Action (CSA) coordinated by the European Securities and Markets Authority (ESMA)1.

The thematic review is divided into two areas, comprising:

  1. Questions concerning the prevention of greenwashing risk and
  2. Other questions regarding the consideration of sustainability risks and sustainability disclosure obligations

The first part of the thematic review assessed findings on the prevention and management of greenwashing risk. Based on the findings, companies do consider greenwashing risk, but they do it in a relatively limited manner. Key findings of the first part of the thematic review:

  • Majority of the companies responded they consider greenwashing risk in their activities, but not all companies had defined the risk in their internal guidelines or risk management policies.
  • Some shortcomings were found in various aspects of the disclosure obligations in all companies participating in the extensive survey, although the Commission SFDR Delegated Regulation defines exactly what must be disclosed in which document and on the website. In addition, some of the information was given at a too general level.
  • ESG qualifications were also used in investment funds that do not have the objective of promoting sustainability characteristics or sustainable investment. This may increase greenwashing risk.
  • All companies had some shortcomings in the fund-specific information provided on the website in terms of quality control of the information and data sources as well as limitations of the data sources.
  • Most of the companies had engagement policies to achieve the sustainability objectives of the funds. However, the companies communicated incompletely to investors about their fund-specific engagement policies and engagement actions taken.

FIN-FSA recommends all companies to study the findings presented in the attached supervision letter about the consideration of greenwashing risk, to assess their operations and take remediating actions where necessary. The FIN-FSA will report separately on the findings of the second part of the thematic review in autumn 2024.

For further information, please contact

  • Anna Mäkipeska, Senior Supervisor, anna.makipeska(at)
  • Nina Männynmäki, Chief Specialist, nina.mannynmaki(at)
  • Riitta Seppä, Chief Supervisor, riitta.seppa(at)


Supervision letter: Thematic review of the consideration of greenwashing risk in investment fundactivities

1ESMA and NCAs to asses disclosures and sustainability risks in the investment fund sector

The corresponding Finnish-language supervision release was published on 20 March 2024