The Financial Conduct Authority (FCA) in the UK has unveiled a consultation on extending its Sustainability Disclosure Requirements (SDR) to portfolio managers, aiming to ensure investors can accurately assess the sustainability attributes of investment products and mitigate greenwashing risks. This initiative follows the FCA’s introduction of SDR requirements for asset managers in November 2023, which included rules on naming, marketing, and labeling sustainable investment products. The proposal extends these requirements to firms managing investments for consumers, focusing on wealth management services and model portfolios. The SDR includes an anti-greenwashing rule and a labelling regime with four labels to differentiate sustainability objectives and investment approaches. Portfolio managers would be subject to the new rules from December 2024, with asset thresholds determining disclosure requirements. Additionally, the FCA released finalized guidance to assist firms in meeting these new rules, aiming to ensure transparent and accurate marketing of sustainable investment products. Sacha Sadan, FCA’s Director of Environmental, Social and Governance, emphasized the importance of these measures in maintaining the UK’s leadership in sustainable investment and providing clarity to firms in marketing their products responsibly.
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