Compliance Briefing — November 28, 2023
The UK FCA finalised Sustainability Disclosure Requirements and investment labels, imposing anti-greenwashing rules, label criteria, and consumer-facing disclosures for asset managers and distributors.
Executive briefing: On November 28, 2023, the UK Financial Conduct Authority published Policy Statement PS23/16, finalising the Sustainability Disclosure Requirements (SDR) and investment labels regime. The rules introduce anti-greenwashing expectations effective May 2024, new sustainability labels, consumer-facing disclosure templates, and distributor obligations.
Immediate compliance priorities
- Product classification. Assess fund and portfolio strategies against the Sustainability Focus, Improvers, Impact, and Mixed Goals label criteria.
- Disclosure design. Prepare consumer-facing disclosures, ongoing product reports, and entity-level sustainability statements aligned to the FCA templates.
- Marketing controls. Implement anti-greenwashing review processes for sustainability claims across marketing materials and client communications.
Control alignment
- Governance. Establish investment governance forums to approve label eligibility determinations and oversee ongoing monitoring.
- Data management. Enhance ESG data sourcing, validation, and stewardship metrics required for label maintenance and annual reporting.
- Distributor oversight. Update distribution agreements to ensure consumer disclosures reach UK retail investors and that distributors maintain availability records.
Enablement moves
- Run readiness assessments mapping existing ESG products to label criteria, highlighting remediation needs.
- Train marketing, product, and advisory teams on the anti-greenwashing rule and disclosure obligations.
- Monitor FCA guidance on transition plan disclosures and future expansion of the regime to overseas funds.
Sources
Zeph Tech supports asset managers with SDR readiness, label governance, and disclosure production to meet FCA timelines.