The Policy Statement, which follows the FCA’s October 2022 consultation paper, introduces new measures which aim to protect consumers by ensuring that they are provided with all of the information necessary to make informed investment decisions.  The package of measures ultimately aims to provide greater transparency, consistency and trust in the market for sustainable investment products and seeks to minimise greenwashing by companies.  The package supports the delivery of the Government’s ambition for Sustainability Disclosure Requirements and labels, set out in the Roadmap to Sustainable Investing, published in October 2011.   

The final package of measures includes:

• An anti-greenwashing rule for all FCA authorised firms to reinforce that sustainability-related claims must be fair, clear and not misleading.
• Four sustainability investment labels to help consumers navigate the investment product landscape and enhance consumer trust.
• Naming and marketing rules for investment products, to ensure the use of sustainability-related terms is accurate.
• Consumer-facing information to provide consumers with better, more accessible information to help them understand the key sustainability features of a product.
• Detailed information in pre-contractual, ongoing product-level and entity-level disclosures, targeted at institutional investors and consumers seeking more information.
• Requirements for distributors (for example, platforms and advisers) to ensure that product-level information (including the labels) is available to consumers.

The anti-greenwashing rule applies to all FCA-authorised firms who make sustainability related claims about their products and services.  It will come into force from 31 July 2024.

The investment labels, disclosure, and naming and marketing rules apply to UK asset managers.  Firms can use investment labels from 31 July 2024 and the naming and marketing rules for asset managers come into effect from 2 December 2024.

The rules do not apply to portfolio management products and services yet. The FRC will consult on this in due course.

Ongoing product-level and entity-level disclosures for firms with assets under management greater than £50 billion will apply from 2 December 2025 with entity-level disclosures being extended to firms with assets under management greater than £5 billion from 2 December 2026.

Concurrently with the publishing of the Policy Statement, the FCA has also published a consultation on additional guidance related to the anti-greenwashing rule in response to feedback received to its October 2022 consultation.  The consultation closes on 26 January 2024.

A press release, the Policy Statement (PS23/16) and consultation on anti-greenwashing guidance are available on the FCA website.