New sustainability rules require honesty

Sustainable finance is “hot”— but “doing the right thing” turns out to be more complex in practice than it seems. In this column, DSI invites professionals to share their perspectives on the tensions, dilemmas, and unwritten rules in sustainable finance. We periodically publish a new guest column, inspired by the dialogue document Between the Lines. What stands out to you? What causes friction in practice? And what is needed to achieve true sustainability in the sector?

By Harald Walkate

New sustainability rules require honesty – and that could become a strategic advantage

With the Dutch implementation of EU Directive 2024/825 [1], the playing field for sustainability communication is changing significantly. Vague claims, broad terminology and optimistic promises will soon only be permitted if they can be sufficiently substantiated. This is not a punishment, but a necessary modernisation.

It also creates an interesting tension. Research by the Dutch Authority for the Financial Markets (AFM) [2] shows that around 60% of consumers who choose sustainable funds expect more than the simple exclusion of controversial companies or selecting companies that are more sustainable than average. They assume their money is doing something extra. “Additionality” is the jargon term for this: making the world a little bit better. Consumers assume that sustainable funds provide this additionality, not so much because providers explicitly promise it, but because consumers intuitively associate it with the word “sustainable”.

The new rules require providers to explain precisely what a fund does and does not do. This may seem restrictive, but it could actually become a strategic advantage. Why? Because clarity and honesty build trust.

Consumers want to know: what exactly is my money doing? What can I reasonably expect? How does a provider define and measure impact or sustainability?

By answering these questions explicitly, a more honest conversation can emerge. And honesty is a scarce asset in a market where sustainability claims have sometimes been made too freely in recent years. Financial institutions can respond by taking three steps:

1. Make sustainability concrete. Explain clearly what a fund does: exclude certain activities, integrate sustainability criteria into the investment process, or actively pursue impact. By defining this clearly, financial institutions can prevent disappointment and build credibility.
2. Communicate proactively about the limits of impact. Many consumers believe that every sustainable fund helps make the world a better place. By honestly explaining that not every fund provides additionality, providers can help create more realistic expectations. This also reflects the different motivations consumers may have. The AFM research shows that some consumers simply want their investments to align with their values, while others expect higher financial returns from investing in more sustainable companies, even if these approaches do not result in a positive change in the world.
3. Develop products that meet the demand for additionality. Thematic strategies and private market solutions can often demonstrate additionality. By positioning these products clearly, financial institutions can respond to the growing demand for “money that makes a difference”.

An opportunity rather than a restriction

The new rules should therefore not be seen as a brake on the sector, but as an opportunity. They encourage the sector to formulate claims more precisely, substantiate them more rigorously and communicate more transparently. In doing so, they help align sustainability communication more closely with what consumers, according to the AFM research, actually expect. Those who invest in methodologies, data and honest communication today will build a sustainability narrative that not only complies with the law, but also meets customer expectations.

The institutions that embrace this transition can position themselves as trusted guides in a market that is beginning to mature. Not by promising more, but by explaining more clearly what they do. And why it matters. Because the need to make the world a little better grows more urgent by the day.

1. [1] https://www.tweedekamer.nl/kamerstukken/wetsvoorstellen/detail?cfg=wetsvoorsteldetails&qry=wetsvoorstel%3A36873
2. [2] https://www.afm.nl/~/profmedia/files/reports/2025/consumer-monitor-investors-2025.pdf

About the “Between the Lines” series

Within the financial sector, the transition to sustainability is in full swing. But what do the laws, guidelines and obligations mean in concrete terms for the day-to-day practice of the financial professional? In the series ‘Between the Rules’ DSI invites experts from the sector to shine their light on the opportunities, challenges and ethical dilemmas of Sustainable Finance. Together we look beyond the rules.

Are you curious about previous articles by Harald Walkate and other columnists, or would you like to learn more about sustainable finance? If so, visit our overview page: www.dsi.nl/susfin.