ESG Enforcement Tracker

Luxembourg’s financial regulator, the CSSF, has fined Aviva €56,500 for failing to comply with its own standards in respect of five sub-funds issued by Aviva under Article 8 of the SFDR. Article 8 funds are required to promote “environmental and social characteristics”.

The administrative fine was imposed on 15 October 2024 following a thematic on-site inspection carried out by the CSSF between 3 October 2022 and 11 May 2023. During that inspection, the regulator identified persistent breaches in Aviva’s internal governance framework.

The CSSF found that while one of the Aviva sub-funds set a threshold for filtering out assets with the least favourable ESG characteristics, in fact it contained several bonds issued by five countries which had an ESG score “well below” the exclusion threshold.

For the other sub-funds, the CSSF found that while Aviva’s prospectus indicated they were targeting several of the sustainable development goals (SDGs) of the United Nations, the measures put in place to ensure that the SDGs were targeted were not adequate.

The CSSF therefore concluded that Aviva was in breach of the requirement to have sound administrative procedures and adequate internal control mechanisms, and that it failed to act in the best interests of the funds.

This is the first time the CSSF has imposed a sanction with regards to the SFDR.