The Danish FSA publishes report on investigation concerning principal adverse impacts

On 10 November 2025, the Danish Financial Supervisory Authority (the “Danish FSA”) published a report assessing financial market participants’ principal adverse impacts (“PAI”) statements. The Danish FSA has looked at how 15 financial market participants have considered principal adverse impacts of their investment decisions on sustainability factors, including their PAI statements, for the reference period 2024. All of the financial market participants reviewed, covering credit institutions, pension companies and investment management companies, took principal adverse impacts on sustainability factors into account.

In general, the Danish FSA concluded that, overall, the PAI statements are considered to be at a satisfactory level. However, a number of shortcomings were also identified in the inspection of companies’ PAI statements.

 

The following key findings were highlighted in the report:

1. Use of the required template: Table 1 in Appendix I to Regulation 2022/1288 (“SFDR level 2 Regulation”) contains the mandatory template to be used by companies for their PAI statement. The review showed that all 15 companies used the required form.
2. Accuracy of indicators: According to the report, there is a discrepancy between the descriptions of the climate and environmental PAI indicators and the social indicators, as the climate and environmental indicators are generally better described by the companies.
3. Incomplete reporting: The examination showed that financial market participants have not always completed all mandatory PAI indicators and that, in some cases, the measures and targets set are not considered sufficiently specific or measurable. Further, in some cases descriptions of measures taken and planned as well as targets set were considered too high-level. The Danish FSA expects financial market participants to be clear in their indication of how they take all PAI indicators into account and to set out concrete and measurable measures and targets.
4. Accessibility: The report highlights that, in some cases, users experienced challenges in accessing financial market participants’ PAI statements online. The statements must be easily accessible to users, which the Danish FSA defines as follows: “Easily accessible means that the PAI statements are either available via a direct link on the front page of the website or are located on a subpage with an appropriate heading, e.g. “Sustainability” or ’ESG information”, so that it is easy for users to find the statements.” (Translated from Danish).

 

The Danish FSA has also included an overview of what constitutes good practice among financial market participants based on the observations. Further, the Danish FSA has emphasized that in case of lack of data it is important that financial market participants include information on what they do to obtain necessary data.

The full report by the Danish FSA can be read here (in Danish).

 

Next steps: The Danish FSA encourages financial market participants to use the findings set out in the report and to work to promote the quality of their PAI statements going forward.

Tags:  SFDRSustainabilityThe Danish FSA