On 28 November 2023, the UK Financial Conduct Authority (FCA) published its Sustainability Disclosure Requirements (SDR). The anti-greenwashing rule took effect from 31 May 2024 and the ‘naming and marketing’ and disclosure rules were slated to come into effect from 2 December 2024.
On 9 September 2024, the FCA announced that it is offering limited temporary flexibility for certain firms trying to comply with the SDR ‘naming and marketing’ rules (ESG 4.3.2R to ESG 4.3.8R of the ESG Sourcebook) recognising that although firms are making good progress to comply with the rules it has taken longer than expected for firm’s to implement the required changes.
Limited temporary flexibility
The FCA is offering limited temporary flexibility until 5pm on 2 April 2025 for firms to comply with the ‘naming and marketing’ rules “in relation to a sustainability product (as defined in the FCA Handbook Glossary) which is a UK authorised investment fund in exceptional circumstances where the firm (i) has submitted an application for approval of amended disclosures in line with ESG 5.3.2R for that fund by 5pm on 1 October 2024 and (ii) that fund is currently using “sustainable”, “sustainability” or “impact” (or a variation of those terms) in its name and is intending to either use a label or change the name of that fund.
The FCA notes that if a fund is able to comply with the ‘naming and marketing’ rules by 2 December 2024, it should do so. Funds should comply with all other provisions of the SDR, including the anti-greenwashing rule.
See our briefing here for more detail about the content of the SDR and here for updates in relation to the anti-greenwashing rule and the extension of the SDR to portfolio managers.
Next steps
Funds should continue to try to meet the 2 December 2024 deadline. For firms facing challenges in complying with the SDR rules or guiding principles for out-of-scope funds, they should contact their supervisor or usual supervisory contact.
Our Sustainable Finance & Investment practice brings together a multidisciplinary global team to support our clients in this mission-critical area.
This note is intended to be a general guide and covers questions of law and practice. It does not constitute legal advice.
