The Netherlands - Regulatory

The Dutch Authority on Financial Markets (AFM) has published its feedback and findings with respect to ESMA’s report on the sustainability-related disclosures and the integration of sustainability risks in the investment management sector. The findings of the ESMA report largely correspond with those of the AFM. Based on these findings, fund managers are provided with some recommendations:

• integrate sustainability risks in your organisation;
• ensure transparency and consistency in ESG-related disclosures in pre-contractual and periodic information; and
• determine and demonstrate the investments’ degree of sustainability.

The AFM calls on all fund managers to implement the recommendations. The integration of sustainability risks and transparency about sustainability are two topics that the AFM continues to focus on in the coming years.

The Dutch Central Bank (DNB) has updated the Guide on climate and environmental risks (the Guide). In its Guide, DNB elaborates its expectations from financial entities with respect to the management of climate risks. In summary, DNB expects AIFs and AIFMs to integrate climate risks into their risk management policies. Additionally, the financial and non-financial risks that originate from climate risks should be accounted for in the applicable prudential reporting requirements and composition of the capital or liquidity requirements. As the Guide contains updated insights into nature-related and legal sustainability risks as well as revised good practices and examples of nature risk management, it is advised that AIFs and AIFMs review their climate risk management once more.