On 28 November 2023, the FCA published a package of measures setting out its final rules and guidance on Sustainability Disclosure Requirements (SDR) and investment labels. The measures are intended to help consumers navigate the market for sustainable investment products, by improving the trust and transparency of such products and minimising greenwashing.

The measures

The package, which is set out in FCA Policy Statement PS23/16, includes measures to introduce:

  • An anti-greenwashing rule for all FCA-authorised firms to reinforce that sustainability-related claims must be fair, clear and not misleading. The FCA is also consulting on supporting guidance (see further details below).
  • Naming and marketing rules for investment products, to ensure the use of sustainability-related terms is accurate.
  • Four labels to help consumers navigate the investment product landscape and enhance consumer trust.
  • Consumer-facing information intended to provide consumers with better, more accessible information to help them understand the key sustainability features of a product.
  • Detailed information targeted at institutional investors and consumers seeking more information in pre-contractual, ongoing product-level, and entity-level disclosures.
  • Requirements for distributors to ensure that product-level information (including the labels) is made available to consumers.

Who do the rules apply to?

The anti-greenwashing rule applies to all FCA-authorised firms that make sustainability-related claims about products and services, while the investment labels, disclosure and naming and marketing rules apply to UK asset managers. The FCA has also introduced targeted rules for the distributors of investment products to retail investors in the UK.

When do they start to apply?

The anti-greenwashing rule will come into effect from 31 May 2024, and firms can use the investment labels from 31 July 2024. The naming and marketing rules for asset managers come into effect from 2 December 2024.

Guidance consultation on the anti-greenwashing rule

The FCA has also published Guidance Consultation GC23/3 setting out proposed new guidance on the anti-greenwashing rule, including its expectations for FCA-authorised firms making claims about the sustainability of a product or service. The proposed guidance is designed to help firms better understand the FCA’s expectations under the anti-greenwashing rule and other existing, associated requirements.

The deadline for comments on GC23/3 is 26 January 2024.