FCA delays publication of Policy Statement for UK Sustainability Disclosure Requirements and investment labels

The FCA has pushed back the publication of its Policy Statement on the Sustainability Disclosure Requirements (SDR) and investment labels regime to Q3 2023 (from the end of H1 2023 initially) in light of the number of responses it received to its Consultation Paper (which we covered here).

With feedback of around 240 responses, the FCA reports that there is broad support for the proposed regime and outcomes the FCA is looking to achieve. The following points are of note:

• The FCA remains committed to ensuring the regime protects consumers first and foremost whilst taking into account the practical challenges firms face under the proposals. This includes considering the approach to the marketing restrictions, refining some of the specific criteria for the labels and clarifying how different products, asset classes and strategies can qualify for a label, including multi-asset and blended strategies;
• The Policy Statement will provide further clarification on certain matters. In particular, the FCA highlight that primary and secondary channels for achieving sustainability outcomes will not be prescribed and the independent verification of product categorisation will not be required to qualify for a label;
• There will be a place for all in-scope products within the overall package of measures, including products that may not qualify for a label but have some sustainability-related characteristics (potentially widening the scope of the regime); and
• The regime is being developed with its coherence to other ESG disclosure regimes in mind.

The delay to the publication of the Policy Statement will also likely mean a delay to the new anti-greenwashing rule (which was proposed to take effect from the publication of the Policy Statement). The application of the regime will also be pushed back from the provisional date of 30 June 2024 (12 months after publication of the policy statement) although the FCA has not yet confirmed a new date for this.

The delays will give in scope asset managers more breathing space to prepare and consider the SDR’s implications, including how it fits into other regulatory regimes asset managers may be subject to. This week has also seen press speculation around the possible revamping of the SFDR. The alignment of these two regimes in addition to other global ESG disclosure frameworks remains far from resolved.