Delayed until April 2025
The UK Financial Conduct Authority (FCA) have delayed the implementation of its Sustainability Disclosure Requirements (SDR) and investment labels regime until next year.
The new naming and marketing rules were originally set to come into effect in early December 2024. However, the FCA has decided to push the implementation to April 2, 2025, noting that it had “become clear” that it has taken “longer than expected” for some firms to make the required changes.
“Given the importance of getting SDR right for investors, we are seeking to take a pragmatic and outcomes-based approach to provide further support to those firms that may need additional time to operationalise any changes required,” the regulator explained.
“Where firms can comply with the new rules without requiring this flexibility, they should do so,” it added.
The SDR and investment labels regime aims to improve consumer trust and reduce greenwashing.
The naming and marketing rules state that if a an investment product wants to make sustainability claims, then it must apply to the FCA for one of four labels. To use one of these FCA approved labels, at least 70% of the overall portfolio arrangement would need to be invested in accordance with this sustainability objective.
Could the SDR regime go further?
For some, the SDR haven’t gone far enough.
Professional Adviser reported that Miranda Beacham, head of UK responsible investment at Aegon Asset Management, called on the FCA to include ethical funds in their remit.
Currently, ethical funds are not included in the SDR’s remit as they are considered values-based investment products by the FCA due to their exclusionary criteria.
“It is a shame,” Beacham said while speaking at the SRI Services Good Money Week conference, “but we will carry on lobbying to try and change the rules because we would like to see another label [for ethical funds].”