UK SDR: UK Sustainability Disclosure Requirements and investment labels | Fieldfisher
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UK SDR: UK Sustainability Disclosure Requirements and investment labels


United Kingdom

Sustainable investing is clearly an area of focus for asset managers around the globe – affecting development of new products but also revisions of existing products and the running of investment strategies generally. With the publication of the FCA's Policy Statement 23/16 at the end of November 2023, UK based asset managers can now plan for how to embrace the new UK SDR regime.

The UK SDR regime comprises a range of measures, each element of which needs to be viewed carefully by firms in the UK market place – and note it is quite different from the EU SFDR regime.

  • The new anti-greenwashing rule applies to all FCA authorised firms. 
  • The additional specific rules within the new SDR regime apply to firms managing UCITS and AIFs (and some specific rules also applying to distributors of UK asset management firms' products).
  • The new UK SDR regime is a labelling regime – with four possible labels: Sustainability Impact, Sustainability Focus, Sustainability Improvers and Sustainability Mixed Goals.
  • Detailed naming and marketing provisions, and requirements for new disclosures, are also being introduced.

The new UK SDR provisions sit on top of the pre-existing general obligations including the principles set out in the July 2021 Dear Chair letter sent to Chairs of AFMs giving guidance on the existing requirements through a set of "Guiding Principles" that explained the FCA's expectations in the area. 

Further, the UK SDR's package must be viewed in the context of the FCA's other regulatory initiatives. Notably, actions taken must be consistent with the UK regulator's flagship initiative introduced in 2023 – Consumer Duty.  Also the FCA is supporting IOSCO's work, supporting the work of the IFRS Foundation which is developing global accounting and sustainability disclosure standards known as IFRS standards.

All firms must prepare for the introduction of the anti-greenwashing rule from 31 May 2024.  Asset managers are able to choose to use the labels from 31 July 2024.

Read the full briefing paper by Kirstene Baillie, Partner, Asset Management and Investment Funds, Fieldfisher LLP here.

Related Work Areas

Financial Services