The Financial Conduct Authority (FCA) has released its final Sustainable Disclosure Rules (SDR) for investment funds as well as anti-greenwashing rules for fund managers.
Sustainable Fund Labels
In order to help both financial advisers and investors to better understand the the differences of eash sustainably invested fund as we move to climate change with envrionmentally friendly, socially responsible and governance (ESG) investing across all sectors. Sustainable funds will have 1 of 4 labels:
Many ‘ESG’ or green funds have suffered falls in value and some by as much as 50% due to reduced investor confidence in them as well as excess demand over supply has led to some companies claiming to be ‘greener’ that what they are.
A consultation paper has been published and will close on 26 January 2024 to require fund managers to be clear, fair and not mis-leadiing with regard to their fund’s ‘green’ attributes. New rules to protect both the consumer and adviser will be in force from 21st May 2024. The rules will cover envronmentally friendly and socially responsible features including
All of the above can only make the ESG market more balanced and open to consumers as well as trying to kill off greenwashing. The challenge now is to educate the market, advisers and consumers and get us all used to these new labels.