Denmark’s financial watchdog has ordered the companies behind eight sustainability funds to take remedial action after finding they had violated European Union disclosure rules on such investments.

The watchdog said failings included a lack of clear, adequate and comprehensive information on the funds’ sustainable investment objectives.

Financial regulators across Europe have increased scrutiny of how fund managers are meeting reporting requirements of the EU’s Sustainable Finance Disclosure Regulation (SFDR), which aims to prevent so-called greenwashing of environmental or sustainability credentials.

“It is important for consumers and investors that they receive sustainability information in a manner which is comprehensible and adequate,” Henrik Brarup Damgaard, head of the ESG supervision unit at the Danish Financial Services Authority (FSA), said in a statement released on Feb. 3.

“It is especially important for the so-called ‘fully sustainable’ funds, where it must be expected that this information constitutes a key component in the investment decision.”

The Danish FSA said the information provided by the funds was too generic or “unclear, inconsistent and incomplete” in several areas and did not provide the necessary information for investors to understand how the sustainability objectives affect how their money would be invested.

The FSA said it had issued orders to the managers of the eight funds, which include some of the region’s biggest banks, such as Nordea (NDAFI.HE) and Danske Bank (DANSKE.CO), which now must ensure the disclosure requirements are met.

The other funds are managed by Investeringsforvaltningsselskabet SEBinvest, Formuepleje, Sparinvest SA and Nykredit Portfolio Administration.

SEBinvest told Reuters it accepted the judgment from the Danish FSA and had already aligned the prospectus of its fund with the agency’s recommendations.

A Nykredit spokesperson said Nkredit and its subsidiary Sparinvest also accepted the FSA improvement notices and had aligned their funds to the recommendations at the end of last year.

None of the other fund managers were able to respond immediately to requests for comment.

The Danish FSA began its review in June 2022, before new rules in January came into force requiring managers to provide more extensive information on the sustainability credentials of the funds they manage.

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