In a further delay to the announcement of the final Policy Statement relating to the Sustainability Disclosure Requirements (SDR) and investment labels, the Financial Conduct Authority (FCA) now intends to publish the final rules in Q4 2023. On 17 July 2023, the FCA published an update to its February 2023 Regulatory Initiatives Grid confirming the delay. As we reported in March 2023, the FCA previously delayed announcing the final rules from the end of H1 2023 to the end of Q3.
Background to the SDR and investment labels consultation proposals
The FCA originally published consultation paper 22/20 (CP22/20) on SDR and investment labels on 25 October 2022. CP22/20 set out the FCA’s proposals for a package of measures aimed at preventing greenwashing. The proposals included details of sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing. We set out the detailed proposals in our October 2022 Engage article.
CP22/20 closed for comments on 25 January 2023. On 29 March 2023, the FCA announced that it was delaying the Policy Statement until Q3 2023 due to the significant amount of feedback (approximately 240 responses) it had received to CP22/20. We understand that the original effective date starting on 30 June 2024 for the final rules to come into effect will be adjusted accordingly.
In the Regulatory Initiatives Grid July update, the FCA said of the SDR, “These changes will help the UK’s asset management sector thrive by setting standards that improve the sustainability information consumers have access to.”.
Next steps
The Sustainable Finance and Investment practice here at Hogan Lovells are following developments in relation to the SDR closely and will report on further news once we hear it. If you would like to discuss the SDR proposals or ESG regulatory requirements more widely please do get in touch with Rita Hunter or Julia Cripps.
Authored by Melanie Johnson.
