FCA confirms sustainability disclosure and labelling regime

FCA has confirmed new rules that should give investors greater confidence in sustainability-related claims about investments. The package consists of:

  • an anti-greenwashing rule, effective from 31 May 2024 that will apply to all FCA-authorised firms and require that sustainability claims be fair, clear and not misleading;
  • product labels based on clear sustainability goals and criteria, which can be used from 31 July 2024 so investors understand what their money is being used for; and
  • naming and marketing requirements on asset managers that address the concern that products are being described as having a positive impact on sustainability when they don’t. These rules will take effect from 2 December 2024.

FCA is consulting on guidance to give firms even greater clarity on the anti-greenwashing rule, on which is asks for comments by 26 January 2024. It clarifies that all sustainability references should be capable of substantiation, should be complete – considering the full life-cycle and not omitting anything important, and should be meaningful in relation to any quoted comparisons.

Emma Radmore