Sustainability Community

The FCA has published its Policy Statement on Sustainability Disclosure Requirements (SDR) and investment labels.
FCA press release: Sustainability disclosure and labelling regime confirmed by the FCA | FCA

Some initial highlights from the Policy Statement:

• Anti-greenwashing rule for all FCA authorised firms: the anti-greenwashing rule will apply from 31 May 2024, so this is six months more than originally foreseen. The FCA has published a consultation on 'Guidance on the Anti-Greenwashing rule' with a deadline of 26 January to respond. 
• Four labels:  (not three!)  Sustainability Focus, Sustainability Improver and Sustainability Impact, along with a fourth label titled 'Sustainability Mixed Goals' to accommodate multi-asset funds. 
  
  
• Disclosure: for funds that opt to use a label, there is a new stand-alone disclosure document for sustainability-related information. Without prescribing a template, the FCA specifies the types of information that must be included. Consumer-facing disclosure for products not using labels but with sustainability-related terms in their names and marketing must include a statement to clarify that the product does not have a label.  
• Naming and marketing rules: the restrictive marketing rules have been reduced from those consulted on, but there will still be obligations on firms that use sustainability-related terms in fund names that don't get a label.  
• Distributors: distributors must communicate the labels and provide access to consumer-facing disclosures to retail investors and will have obligations to include a notice on overseas products to clarify that they are not subject to SDR. 
  

  
  Implementation timelines:

  

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James Doyle
Director, Green Finance, Investment Management
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Thanks for sharing James. This will certainly generate a debate on the implementation of the new SDR requirements.

I also find it relevant to note the alteration in the approach to the prohibition of certain sustainability-related language.

Looking forward to hearing more from the other members of the group.

The FCA has published its Policy Statement on Sustainability Disclosure Requirements (SDR) and investment labels.
FCA press release: Sustainability disclosure and labelling regime confirmed by the FCA | FCA

Some initial highlights from the Policy Statement:

• Anti-greenwashing rule for all FCA authorised firms: the anti-greenwashing rule will apply from 31 May 2024, so this is six months more than originally foreseen. The FCA has published a consultation on 'Guidance on the Anti-Greenwashing rule' with a deadline of 26 January to respond. 
• Four labels:  (not three!)  Sustainability Focus, Sustainability Improver and Sustainability Impact, along with a fourth label titled 'Sustainability Mixed Goals' to accommodate multi-asset funds. 
  
  
• Disclosure: for funds that opt to use a label, there is a new stand-alone disclosure document for sustainability-related information. Without prescribing a template, the FCA specifies the types of information that must be included. Consumer-facing disclosure for products not using labels but with sustainability-related terms in their names and marketing must include a statement to clarify that the product does not have a label.  
• Naming and marketing rules: the restrictive marketing rules have been reduced from those consulted on, but there will still be obligations on firms that use sustainability-related terms in fund names that don't get a label.  
• Distributors: distributors must communicate the labels and provide access to consumer-facing disclosures to retail investors and will have obligations to include a notice on overseas products to clarify that they are not subject to SDR. 
  

  
  Implementation timelines:

  

------------------------------
James Doyle
Director, Green Finance, Investment Management
------------------------------