Executive Summary
The UK Financial Conduct Authority (FCA) published new rules – the Sustainability Disclosure Requirements – in November 2023 to help investors navigate the investment product landscape and protect them from greenwashing. The regulations cover product labels, disclosures, naming and marketing requirements, rules for distributors and a broad anti-greenwashing rule for all authorised firms. New product labels for sustainable products are optional and are expressly not a disclosure regime. They are designed to cover different investment profiles and include the following:
- Sustainability Focus
- Sustainability Improver
- Sustainability Impact
- Sustainability Mixed Goals
The anti-greenwashing rule is subject to further consultation, with the FCA seeking to provide further guidance to support affected parties.
The consultation is available here and closed on 26 January 2024. AIMA’s response to the consultation is available here. Please contact Adam Jacobs-Dean or Thomas Sharpe with any questions regarding these proposals.
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Adam Jacobs-Dean
Managing Director, Global Head of Markets, Governance and Innovation
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Thomas Sharpe
Associate Director, Markets, Governance and Innovation
Practical Implications
In-scope firms need to review their current products that are marketed as “sustainable” to ensure they meet the criteria of the investment label and naming and marketing rules. This may involve making changes to products in order to ensure that they qualify. Sustainable products will also need a sustainability objective. Firms should consider whether they have the processes in place to ensure compliance.
Timeline
AIMA has categorized this proposal as Medium Priority/Medium Impact and it is therefore represented in mid-dark blue in the AIMA Regulatory Horizon Scan gantt chart.
Compliance date for entity-level disclosures in the sustainability entity report – All other firms | December 2, 2026 | **New** | |
Compliance date for entity-level disclosures in the sustainability entity report – largest firms | December 2, 2025 | **New** | |
Compliance date for first ongoing sustainability performance-related product-level disclosures for firms using product labels – on demand | From December 2, 2025 | **New** | |
Compliance date for first ongoing sustainability performance-related product-level disclosures for firms using product labels – public |
From July 31, 2025 | **New** | |
Compliance date for first ongoing sustainability performance related product-level disclosures – firms using sustainability terms without product labels | 12 months after terms first used | **New** | |
Compliance date for naming and marketing rules, consumer-facing and pre-contractual disclosure requirements – firms using sustainability terms without product labels | December 2, 2024 | **New** | |
Compliance date for notice on overseas funds - distributors | December 2, 2024 | **New** | |
Compliance date for product labels and consumer-facing disclosure requirements - distributors | From July 31, 2024 | **New** | |
Compliance date for sustainable product labels, naming and marketing rules, consumer-facing and pre-contractual disclosure requirements – firms using product labels | From July 31, 2024 | **New** | |
Estimated compliance date for general anti-greenwashing requirement | May 31, 2024 | **New** | |
AIMA responds to GC23/3 | January 26, 2024 | ||
FCA publishes consultation paper GC23/3 on anti-greenwashing requirement | November 28, 2023 | **New** | |
Publication of Policy Statements | November 28, 2023 | **New** | |
AIMA responds to CP 22/20 | January 25, 2023 | ||
FCA publishes consulation paper CP22/20 | October 25, 2022 |