Disclosures for sustainable investments in the UK

The FCA Publishes its Policy Statement on Sustainability Disclosure Requirements and Investment Labels

Disclosures for sustainable investments in the UK
December 11, 2023


On 28 November 2023, the Financial Conduct Authority (FCA) published Policy Statement PS23/16 Sustainability Disclosure Requirements (SDR) and investment labels, setting out the final rules and guidance for a new regime to enhance the transparency and comparability of sustainable investment products.

The new set of rules follows a consultation (CP22/20) issued in October 2022 and a discussion paper (DP21/4) issued in November 2021 and involved extensive consultations with a working group made of key financial market stakeholders and independent experts. The regime's goals are to prevent greenwashing, promote consumer choice, and facilitate the transition to a low-carbon economy by informing and protecting consumers, and at the same time improving consumer trust in the market for sustainable investments.


The rules apply to UK firms and their UK-domiciled products that are marketed to retail clients in the UK and that have sustainability characteristics or objectives. The rules cover different aspects of the regime, such as

  • labelling,
  • product-level disclosures,
  • naming and marketing, and
  • entity-level disclosures, depending on the type and status of the firm and the product. As detailed below, different rules will become applicable at different points in time.

The rules do not for the time being apply to overseas funds. The aim of the regime is to provide consumers with transparent and consistent information about the sustainability credentials of all products marketed in the UK. The regime is also meant to create a level playing field for all firms marketing their products in the UK, including those in the asset management sector. The government is considering extending the regime to overseas recognized funds and will work with His Majesty´s Treasury (HMT) to understand the options for this. Ultimately, the decision to extend the regime to overseas funds is up to HMT.

The rules and guidance

The final package of measures includes anti-greenwashing rules, naming and marketing rules and disclosure rules.

Anti-greenwashing rules

Purpose: Help ensure that sustainability-related claims made by FCA-authorized firms about their products and services are fair, clear, and not misleading, and consistent with the sustainability profile of the product or service.

Scope: All communications made by any FCA-authorized firm, about financial products or services which refer to the sustainability characteristics of those products or services. These can be found, without limitation, in statements, assertions, strategies, targets, policies, information, and images.

Application: From 31 May 2024 to all FCA-authorized firms.

Rule/GuidanceRule/Guidance: The FCA is currently consulting on guidance for the anti-green washing rule, the deadline for responses is  26 January 2024.

Investment labels

Purpose: Help consumers navigate the market, differentiate between the different sustainability objectives and investment approaches to achieve those objectives, and consequently build market trust.

Application: From 31 July 2024, applicable to all FCA-authorized firms using product labels.

Rules/Guidance: The FCA has introduced a voluntary labelling system for products seeking positive sustainability outcomes. Four labels are available, and naming and marketing rules have been updated to help consumers distinguish between labelled and non-labelled sustainable products. The labels are not hierarchical and to use one, products must meet the general and specific criteria relating to that label on an ongoing basis. The general criteria include a sustainability objective, investment policy and strategy, KPIs, resources and governance, and stewardship. The four labelled categories are Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals. Each category has specific requirements for the sustainability objective, investment strategy, and measurable impact. KPIs can be used to demonstrate progress towards the sustainability objective.

  • Sustainability Focus: products investing mainly in assets that are sustainable for people and/or the planet.
  • Sustainability Improvers: products investing in assets that may not be sustainable now, with an aim to improve their sustainability for people and/or planet over time, including in response to the stewardship influence of the firm.
  • Sustainability Impact: products investing in solutions to problems affecting people or the planet (often in underserved markets or to address observed market failures) to achieve real-world impact. These products would have an explicit objective to achieve a positive, measurable contribution to sustainable outcomes.
  • Sustainability Mixed Goals: for funds that invest across different sustainability objectives and strategies aligned with the other categories. Firms using the ‘Sustainability Mixed Goals’ label will need to meet the requirements under the specific criteria for each of the other labels the fund is invested across.

Naming and marketing rules

Purpose: In relation to investment products, to ensure the use of sustainability-related terms is accurate.

Scope: The rules apply to products made available to retail investors that do not use one of the labels described above and sustainability related terms are used to market the product.

Application: From 2 December 2024, FCA- authorized firms using sustainability-related terms without product labels.

Rules/Guidance: Sustainability-related terms can only be used in product names and marketing if:

  • a label is used, as described above, in line with the requirements of the label, or
  • where a label is not used, the firm complies with the ‘Product name’ and ‘Marketing’ requirements, which are:
    • Products name: (x) the product must have sustainability characteristics accurately reflected in the name; (y) the terms ‘sustainable’, ‘sustainability’, ‘impact’ and any variation of those terms may not be used; and (z) firms must advertise that the product does not have a label and the reasons why; and
    • Marketing: Firms must produce the same disclosures and statement as those required when sustainability-related terms are used in the name of a product.


Purpose: To provide consumers with information to understand the key sustainability features of the product they are investing in.


  • Consumer-facing and pre-contractual disclosures: from 2 December 2024 to all FCA-authorized firms using sustainability-related terms in product names and marketing products with or without the use of a label.
  • Ongoing product level disclosures: annually from one year after the sustainability term are first used.
  • Entity-level disclosures: from 2 December 2024 to all asset managers with assets under management (AUM) of above £5million regardless of whether they use a label or sustainability terms.

Rules: For products that make sustainability claims but do not have a label, firms must provide the same disclosure as labeled products. This includes consumer-facing disclosure, pre-contractual disclosure, and ongoing product-level disclosure. Additionally, asset managers with an AUM of more than £5million must adhere to the Task-Force on Climate-related Financial Disclosures and The International Sustainability Standards Board´s four pillars. This means they must disclose their governance, strategy, risk management, and metrics and targets for managing sustainability-related risks and opportunities.


Purpose: Given the role of distributors in communicating sustainability-related information to consumers the measures will be adopted to ensure the appropriate labels and disclosures are communicated.

Application: Applicable to distributors from 31 July 2024 where firms are using labels or 2 December 2024 in relation to notices on overseas funds.

Rules: Distributors are required to communicate the labels and consumer-facing disclosures to retail investors through a relevant digital medium or their usual communication channel. They must keep the information updated with any changes made by the firm. For overseas products, a notice must be included clarifying that they are not subject to UK sustainable investment labelling and disclosure requirements. The notice must be prominent and include a link to the FCA webpage for consumers or communicated via the distributor's usual channel.

December 11, 2023