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Danish FSA puts its foot down over passive funds: Sustainable products must invest sustainably

Passively managed funds must be just as sustainable as actively managed funds, says the Danish FSA, after oil was discovered in several index offerings.

Photo: RICK WILKING/REUTERS / X00301

"Dark green" Article 9 funds are sustainable, and their investments must be, too, the Danish FSA (Finanstilsynet) confirms to AMWatch's sister media FinansWatch. Even if a fund invests passively, the provider cannot hide behind a benchmark and claim it makes it green.

The agency states that if there are oil companies in the portfolio, the manager must be able to document that they do not damage the environment, and if the fund is an equity fund, the manager must be able to explain how the investments work towards the fund's sustainable goal.

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