The Financial Conduct Authority (FCA) has announced a comprehensive set of measures aimed at enhancing the sustainable investment sector.
These initiatives are in response to the global management of an estimated $18.4trn in ESG-orientated assets.
Key elements include the introduction of sustainability disclosure requirements. These are designed to provide clarity and standardisation in how sustainability is measured and reported.
Another measure is an investment labels regime, that will assist investors in understanding how their investments align with specific sustainability goals. There will also be an anti-greenwashing rule, which mandates that all authorised firms ensure their sustainability-related claims are fair, clear, and non-misleading.
Also part of the measures were naming and marketing requirements – which means products cannot falsely claim a positive impact on sustainability. The FCA will also implement a consumer protection focus, which means it is geared towards helping consumers make informed decisions, supported by research indicating a lack of confidence in sustainability claims.
Sacha Sadan, the Director of Environmental, Social and Governance at the FCA, emphasised the importance of these measures for consumer protection and trust in sustainable investments, stating, “We’re putting in place a simple, easy to understand regime so investors can judge whether funds meet their investment needs – this is a crucial step for consumer protection as sustainable investment grows in popularity.”
These initiatives also align with findings from the FCA’s Financial Lives survey, which showed a significant majority of UK adults prefer investments that positively impact the environment and society.
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