FCA extends anti-greenwashing guidance and sustainability framework

Posted on May 5, 2024 by Editor

The Financial Conduct Authority (FCA) has confirmed anti-greenwashing guidance and proposed extensions to its sustainability framework. These initiatives aim to safeguard against greenwashing, helping investors gain a clear picture of claims regarding the sustainability of financial products and services.

The anti-greenwashing rule, set to take effect on 31 May, reflects growing interest in sustainable finance among consumer investors, evidenced by a survey which indicates that 81% of adults seek investments that deliver both financial returns and positive societal impact. The FCA's anti-greenwashing guidance, coupled with proposals for extended disclosure requirements and investment labels, aims to ensure market integrity and to empower consumers to align their investments with their values.

Central to the FCA's efforts is the proposed extension of Sustainability Disclosure Requirements (SDR) to portfolio managers. These requirements, which mirror those introduced for asset managers in November 2023, include product labelling and marketing standards to enable consumers to make informed decisions about sustainability-related financial products. Portfolio managers, who oversee investments for consumers, will be subject to similar disclosure and labelling obligations, facilitating clearer communication of the environmental and social impacts of investment choices.

For further details on the FCA's proposals and initiatives, including the consultation paper on extending the SDR regime to portfolio management, visit the FCA website.