Last November the Financial Conduct Authority (FCA) published Policy Statement 23/16 (PS23/16) containing final rules and guidance on sustainability disclosure requirements (SDR) and investment labels (UK SDR regime). The rules and guidance are currently limited to UK asset managers and essentially the requirements comprise of two components, naming and marketing requirements so that products cannot be described as having a positive impact on sustainability when they do not and a product labelling regime designed to help investors understand what their money is being used for, based on sustainability goals and criteria and naming. PS23/16 also saw the FCA introduce an anti-greenwashing rule which applies to all FCA authorised firms.
Many asset management firms that are subject to the UK SDR regime were already subject to the EU Sustainable Finance Disclosure Regime (EU SFDR). In particular, many would have invested in systems and processes to classify products according to the EU SFDR provisions. Whilst the FCA has said that the regimes are compatible and that much of the information used for product categorisation and disclosures under the EU SFDR may be used to meet the qualifying criteria and disclosure requirements under the UK SDR regime there remains some important differences.
In our latest briefing note, we discuss many of these differences.