On 19 April 2023, the House of Commons published a letter from the UK Sustainable Investment and Finance Association (UKSIF) thanking the Treasury Sub-Committee on Financial Services Regulations for its invitation to give evidence to the ‘Greenwashing: sustainability disclosure requirements (SDR)’ inquiry.
The letter notes that UKSIF and its members continue to be strongly supportive of the SDR regime’s overall objectives, namely enhancing consumer protection and addressing greenwashing risks in the market.
However, the UKSIF flags that, as it highlighted during the evidence session, it does foresee a number of implementation challenges for the market with the SDR measures as currently proposed. This includes the treatment of multi-asset funds and funds of funds; the marketing provisions, particularly for those funds that could fall outside of the UK’s labelling system; the disclosures on ‘unexpected’ investments; and the sequencing of SDR with the need for government to outline its approach to company-level disclosures to ensure underlying data is as consistent as possible for firms to meet SDR’s requirements.
Furthermore, given the good progress made by the Disclosures and Labels Advisory Group (DLAG) and the FCA through its close collaboration, the UKSIF says that it would like to see active consideration from the regulator to continuing to convene the DLAG on an ongoing basis, specifically beyond the finalising of the SDR measures later this year. This would have the primary objective of facilitating the SDR framework’s smooth implementation in the UK market, and addressing issues as they arise for clients and savers. UKSIF suggests that the DLAG could provide detailed technical guidance and Q&As to firms on a regular basis, while serving as platform for further, direct engagement with fund managers and wider stakeholders, such as the Treasury Sub-Committee on Financial Services Regulations.