Sustainable Finance & SPOT Controls: Where Do Investment Service Providers Stand in 2026?

Analysis of SPOT controls on integrating sustainability preferences by investment service providers: Key issues, best practices, and improvement avenues.

Since August 2022, investment service providers (ISPs) in France have been required to systematically collect, analyze, and integrate the sustainability preferences of their non-professional clients before advising on investments. This obligation, stemming from Delegated Regulation (EU) 2021/1253, which amends MiFID II, marks a significant step in Europe’s ambition to redirect savings toward investments that are more environmentally and socially responsible.

Yet, nearly four years after its implementation, the results of the 2026 SPOT controls conducted by the AMF and ACPR paint a mixed picture: undeniable progress, but also persistent gaps, inconsistencies between firms, and an offering that sometimes struggles to meet expressed expectations.

How can we explain these disparities? What best practices are emerging? And, above all, what steps must the companies involved take to fully comply while transforming this regulatory constraint into a driver of innovation and differentiation?

We have delved into the analysis of the SPOT controls to highlight concrete advancements and areas needing clarification.

A Demanding Regulatory Framework and Uneven Implementation

Why These New Rules?

The European Union has placed sustainable finance at the heart of its ecological and social transition strategy. The dual objective is clear: redirect financial flows toward genuinely sustainable activities and investments; and ensure transparency to prevent savers from being steered toward products that do not align with their values or expectations.

To achieve this, Delegated Regulation (EU) 2021/1253 requires ISPs to systematically collect clients’ sustainability preferences before making any investment recommendation. These preferences are defined according to three regulatory pillars:

Alignment with the EU Taxonomy, which identifies environmentally sustainable economic activities.
SFDR criteria (Sustainable Finance Disclosure Regulation), which govern the disclosure of sustainability-related information about investments.
Principal Adverse Impacts (PAIs), which assess the negative effects of activities on the environment, social issues, governance, and human rights.

– >The major challenge lies in the dependence of ISPs on asset managers and other producers to identify and offer financial instruments aligned with these criteria.

Some producers still struggle to provide reliable, comparable, and comprehensive data, making it difficult for distributors to meet client preferences. As a result, certain firms find themselves unable to offer instruments that meet specific sustainability preferences due to a lack of available options on the market.

To facilitate reliable data exchange between producers and distributors, the European ESG Template (EET), developed by FinDatEx, has become the gold standard since 2022. It standardizes ESG data for financial products, aligning with the requirements of SFDR, the EU Taxonomy, MiFID II, and the Insurance Distribution Directive (IDD). Its use is now recommended for all exchanges between manufacturers and distributors of financial instruments in Europe

Mixed Results: Aspirations vs. Reality

Uneven Adoption Across Firms

The 2026 SPOT controls revealed striking disparities among the five ISPs analyzed. Some firms reported that 50% of their clients expressed sustainability preferences, while others struggled to exceed 15%. This gap is largely explained by the central role of advisors, whose ability to guide, explain, and encourage clients to articulate their preferences is decisive.

Yet, even in firms where adoption is highest, only 1% to 6.5% of clients provide detailed preferences—that is, specific criteria related to the Taxonomy, SFDR, or PAIs.

The remaining clients expressing interest in sustainability settle for generic preferences, often vague in ambition or precision.

A striking finding: between 83% and 87% of clients do not express any sustainability preferences at the time of advice.

-> These figures underscore a major challenge in awareness and education, while also presenting an opportunity for proactive firms: the chance to position themselves as trusted guides, capable of helping clients define their expectations for responsible investing.

For further insights into the evolution of regulatory guidance and its impact on ISPs, consult the ESMA Guidelines ESMA35-43-3172 on suitability assessments under MiFID II, published in April 2023 and applicable since October 2023. These guidelines clarify European regulators’ expectations regarding the integration of sustainability preferences in the client journey.

Governance: Initial Delays, but Positive Momentum Since 2024

A Rocky Start

When the new obligations came into force in August 2022, no firm was fully compliant. Several factors contributed to this initial delay:

The complexity of regulatory texts often exceeded teams’ ability to grasp concrete expectations.
Lack of reliable data from producers slowed the implementation of preference collection and analysis systems.
ESMA’s updated guidelines (April 2023) introduced much-needed clarifications but arrived late, further complicating firms’ tasks.

Positive Momentum Since 2024

Over the past two years, a positive dynamic has taken hold, driven by:

Agile governance structures, with dedicated steering committees accelerating compliance projects.
Enhanced collaboration between ISPs and producers within their groups, fostering better alignment of processes and expectations.
Mandatory training for advisors, though content has sometimes remained too theoretical and poorly adapted to the practical needs of client dialogue.

Yet, lingering concerns remain:

Delayed updates to internal procedures: Four out of five firms formalized the new requirements only after their implementation date, in disregard of Article L. 533-10 II of the French Monetary and Financial Code and Delegated Regulation (EU) 2017/565.
Lack of clarity in procedures: Critical issues are often unaddressed, such as managing clients with preferences for multiple criteria or ensuring a neutral and unbiased approach during preference collection.

To understand how the AMF has integrated these guidelines into its supervision, refer to its updated DOC-2019-03 position paper, reflecting European expectations regarding the integration of sustainability preferences in suitability assessments.

Sustainable Investment Offerings: A Headache for ISPs

Unstandardized Calculation Methods

To identify financial instruments with sustainability characteristics, ISPs rely on data provided by producers.

On the one hand, there are significant disparities in calculating sustainable investment rates according to the SFDR regulation. Each producer uses its own methodology, which leads to substantial differences in the assessment of the sustainability of the instruments.

– >Direct consequence: distributors (PSIs) have difficulty comparing offers and guaranteeing the reliability of the information transmitted.

On the other hand, some institutions may not offer any instruments aligned with the Taxonomy due to a lack of available or reliable data. Yet, the European Taxonomy is one of the pillars of sustainable finance in Europe, and its alignment is a key criterion for many savers.

Labels: An Insufficient and Sometimes Misleading Solution

Faced with this lack of standardization, some ISPs have turned to labels (e.g., ISR, Greenfin, Finansol) to identify “sustainable” instruments. However, this approach has several limitations:

Labels do not cover all three regulatory criteria (Taxonomy, SFDR, PAIs), leading to partial or biased views of sustainability.
Greenwashing risk: Some labels emphasize social or governance criteria without ensuring strict environmental alignment.
Lack of transparency: The underlying criteria of labels are not always clearly explained to clients, potentially distorting their expectations.

To standardize data exchange between producers and distributors, the European ESG Template (EET) has become indispensable. It enables the harmonization of ESG data and facilitates the comparison of offerings based on regulatory criteria. Its use is now recommended for all market participants

Client Journey: Balancing Education and Unintentional Biases

Well-Structured but Flawed Questionnaires

To collect client sustainability preferences, ISPs have widely adopted structured questionnaires, designed to guide investors step by step. These typically involve

The client indicating whether they wish to include sustainability in their investment choices.
If the answer is yes, the questionnaire prompts them to specify expectations, such as defining a minimum alignment rate for the Taxonomy or SFDR.
If the answer is no, their preferences are classified as generic, meaning non-detailed.

Despite this clear structure, several issues persist:

Vague qualitative thresholds: Some firms use terms like “low,” “medium,” or “high” without linking them to clear minimum percentages. Clients thus remain unclear about what share of their savings will genuinely be invested in sustainable activities.
Lack of broad ranges: No ISP has offered a range extending up to 100%, limiting clients’ freedom of choice and their ability to express strong sustainability preferences.
Insufficient explanation of PAIs: In some cases, clients are not informed which Principal Adverse Impacts are considered in the suitability assessment of their portfolio.

Mistakes to avoid at all costs

Providing misleading information: One firm assured clients that proposed investments would align with their preferences… despite the client’s criteria not being considered in the suitability assessment.
Lack of traceability: Several firms failed to retain records of explanations provided to clients about sustainability preferences, in violation of Article L. 533-12 of the French Monetary and Financial Code.

For more details on ESMA’s expectations regarding education and preference collection, consult ESMA35-43-3172 Guidelines .

Suitability: When Supply Fails to Meet Demand

Automated Tools with Persistent Limits

Three out of five ISPs have implemented automated tools to match client sustainability preferences with the characteristics of available financial instruments. Automation offers several advantages:

Fewer errors in preference and offering analysis.
Time savings for advisors, allowing them to focus on client education.

However, limitations remain:

One firm did not collect the portfolio percentage clients wished to allocate to sustainable instruments, contradicting ESMA guidelines.
Another failed to consider all PAIs selected by the client in the proposed financial instruments, potentially leading to partial misalignment.

Sometimes Inadequate Recommendations

Three out of five ISPs did not invite clients to adjust their preferences when no instrument matched their expectations, despite regulatory requirements.
Two ISPs allowed advisors to provide investment advice even when the client refused to adapt their preferences or when no instrument matched their criteria, in violation of the rules.

! A critical regulatory reminder !

If no instrument aligns with a client’s sustainability preferences, the ISP must:

Clearly explain the reasons for the misalignment to the client.
Propose adjusting preferences, with the client’s explicit consent.
Document this process in the suitability report, including the proposed adjustment, the client’s response, and any new preferences expressed.

Consequences of shortcomings:

Incomplete or misleading suitability reports: Four out of five firms failed to mention generic preferences expressed by clients.
No records of adaptation proposals, client responses, or new preferences, in disregard of Article L. 533-15 II of the French Monetary and Financial Code and Delegated Regulation (EU) 2017/565.

For an understanding of how the AMF and ACPR have framed these requirements, consult their 2026 SPOT control synthesis.

What This Means for Firms and the Sector

Five Urgent Actions for ISPs Under Scrutiny

Given the findings of the SPOT controls, ISPs must act swiftly to fully comply with regulations while transforming this constraint into an opportunity for differentiation and innovation.

Standardize Data Collection

ISPs must require producers to provide standardized files, such as the European ESG Template (EET), to ensure data reliability and comparability. They should also develop internal rating tools to cross-reference producer data with regulatory criteria and identify inconsistencies.

Go Beyond Technical Training for Advisors

Training must move beyond theoretical presentations of regulations. It should include practical modules on explaining key concepts (Taxonomy, SFDR, PAIs) and real-world cases to help advisors engage effectively with clients. Linking a portion of variable compensation to ESG mastery—without incentivizing the over-sale of sustainable products—can further motivate teams.

Enhance Transparency and Education

Firms should use visual aids (infographics, concrete examples, comparisons) to clarify what sustainability preferences truly mean for clients. It is crucial to fully trace expressed preferences, including generic ones, and any adjustments, in suitability reports. Clients must also receive clear, unambiguous information about the criteria considered, including PAIs.

Automate with Caution and Engage in Dialogue

Automated tools are valuable, but they must be carefully configured and regularly audited to avoid bias. In cases of misalignment between client preferences and available offerings, ISPs must actively engage in dialogue with clients to explain the situation and propose alternatives aligned with their values.

Innovate in Product Offerings and Client Relations

ISPs can collaborate closely with producers to expand their range of sustainable instruments. They should also consider offering simulators or interactive tools to help clients understand the impact of their investment choices and refine their preferences. Finally, integrating sustainability into overall corporate strategy—rather than treating it as a mere regulatory constraint—can strengthen credibility and attractiveness.

Implications for Other Sector Actors

The 2026 SPOT controls offer valuable lessons for the entire sustainable finance sector:

Producers of financial instruments must standardize their methods for calculating alignment rates with the Taxonomy and SFDR, and develop genuinely aligned offerings rather than relying solely on labels.
Fintechs and RegTechs can play a key role by creating analysis and dialogue tools to streamline the collection, analysis, and tracking of sustainability preferences. They can also offer simulators or interactive platforms to help clients better grasp the impact of their choices.
Regulators (AMF, ACPR) would benefit from publishing benchmarks comparing ISP performance and strengthening controls on the traceability of preferences and the quality of suitability reports. More proactive communication on best practices and common shortcomings could accelerate compliance.
Clients and consumer associations must demand greater transparency regarding how their preferences are considered. They can also raise awareness of the importance of expressing these preferences—even if they seem complex—and contribute to improving systems by sharing their feedback.

Conclusion: Sustainable Finance Under Construction, Between Challenges and Opportunities

The 2026 SPOT controls confirm that sustainable finance is no longer an option but a regulatory and operational reality. However, despite tangible progress since 2024 in governance, training, and automated tools, major challenges persist:

Lack of standardization in alignment rate calculation methods.
Biases in preference collection, particularly the absence of quantitative translation for qualitative thresholds
Incomplete or misleading suitability reports, failing to reflect client preferences accurately.
Low expression of detailed preferences by clients, highlighting a pressing need for education and simplification.

For ISPs, the road ahead is long, but the stakes are twofold:

Comply without delay to avoid sanctions and preserve reputation.
Innovate and differentiate by turning regulatory constraints into levers of trust, transparency, and alignment with societal expectations.

For the sector as a whole, these controls present a unique opportunity to rebuild investor confidence by offering products truly aligned with their values, while actively contributing to ecological and social transition.

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