The Sustainable Finance Disclosure Regulation (SFDR) is causing ‘misunderstanding and misinterpretation’ for Norwegian investment firms and selected fund managers, leading to unclear and misleading information, according to a report from the Financial Supervisory Authority of Norway (Finanstilsynet).

Through supervisory work in 2024 and 2025, Finanstilsynet looked at how investment firms and selected fund managers were complying with the rules of the regulation, which requires all financial advisers in Norway to publish an account of how they integrate sustainability.

It found that most companies have taken steps to comply with the requirements, and many have invested significant resources in providing accurate information.

However, several misunderstandings and misinterpretations occurred, resulting in the information provided often being unclear, difficult to understand, and, in some cases, misleading.

It also revealed that some companies have not taken steps to comply with the regulations at all.

Consequently, the report summarised key areas in which clarification was needed.

Notably, it stated that several securities firms misinterpreted or overlooked the requirements, such as mistakenly believing they were exempt from the rules.

It also found a misleading use of ratings in marketing.

Several companies presented ratings as if the funds contributed to sustainable development, while in reality, they were concerned with whether sustainability could negatively affect the funds' returns.

In addition, some companies gave the impression in their marketing that the funds possess sustainability characteristics through the use of branding schemes, logos, or other imagery, while simultaneously keeping the funds outside of the sustainability obligations.

Meanwhile, in the statutory documents, many firms confused sustainability risk with the investment's negative impact on sustainability factors or contribution to sustainable development.

It also added that there were relatively few companies that described the guidelines for identifying, prioritising and managing sustainability risks in a "comprehensive and understandable way."

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