Sustainability Disclosure Requirements
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Investing for a better tomorrow
SDR, we believe will have positive benefits in terms of reducing greenwashing risk and improving investor understanding. It will generally improve the quality of the sustainability offering in the UK, having set a high bar for inclusion, with (non-labelled) sustainability funds having to prove their credentials with a high hurdle.
We have submissions in progress with the FCA across our fund range. We are seeking labels (or non-labelled status) as appropriate for our approach to managing each fund. We will confirm which labels will be applied to our funds when we received approval and are permitted to do so.
Funds that don’t meet the threshold standards required for the labels but continue to pursue a sustainability-like strategy will be required to comply with rules for unlabelled sustainability funds, which include the similar requirements for disclosures as labelled funds. We believe these funds will still play a valuable role in the market.
Investing for a better tomorrow
While the FCA has set a high bar for Funds to achieve a sustainability fund label, the labelling system is not designed to be hierarchical, either within the labelling framework itself (including the four labels and non-labelled funds with sustainability characteristics) or with mainstream funds with no sustainability characteristics.
SDR is designed to provide clarity and assurance, as well as investor choice. In short, SDR will provide investors with a clearer framework for understanding the sustainability intention of a fund, as well as more information about its progress against specific sustainability goals.
The new regulations restrict the use by non-labelled funds of terms directly included in the SDR labelling regime, but permit the use of other related terms (e.g. Socially Responsible Investing) as long as the fund adheres to the FCA Guiding Principle, as well as Anti-Greenwashing Rules.
Investing for a better tomorrow
The FCA’s four new SDR labels are intended to provide investors with the necessary information to make educated decisions as to which funds best align with their needs and sustainability inclinations.
- Sustainability Focus: these funds invest in assets that are environmentally or socially sustainable, determined by a robust, evidence-based standard of sustainability.
- Sustainability Improvers: these funds invest in assets that have the potential to become more sustainable over time, determined by their potential to meet a robust, evidence-based standard of sustainability over time.
- Sustainability Impact: these funds seek to achieve a predefined, positive, measurable environmental and/or social impact.
- Sustainability Mixed Goals: these funds invest in assets that meet or have the potential to meet a robust, evidence-based standard for sustainability, and/or invest with an aim to achieve positive impact.
Dedicated to Responsible & Sustainable Investing
Given our longstanding approach to Responsible and Sustainable investment, our product range – and, indeed, our processes, governance structures and fundamental purpose as a business – is intrinsically aligned to the FCA’s new SDR and investment labeling regime.
Partnering with us can empower your clients with a suite of investment strategies designed to help address pressing environmental and social challenges, while seeking to deliver competitive rates of return.
We have active submissions with the FCA for our fund range. We are seeking labels (or non-labelled status) as best reflects our existing approach to managing these funds and will share further details in due course. We continue to work closely with the FCA, industry groups and legal counsel to ensure full compliance ahead of the relevant deadlines.
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