The FCA’s Sustainability Disclosure Requirements (SDR) represent its most ambitious plan to improve transparency and consumer trust in the market for sustainable investment products. The new package of measures includes an anti-greenwashing rule, specific investment product labels, comprehensive disclosure and marketing guidelines that should help to bring greater clarity and confidence to retail investors making informed decisions about their sustainable investments.
SDR is based on a principles-based approach to sustainability disclosure obligations which should limit a box-ticking approach to compliance. But with looming deadlines for implementing the new rules, the lack of prescriptions means that there is more flexibility for firms to interpret the rules and a greater scope for divergent approaches to SDR implementation. For instance, a recent report from the UK Sustainable Investment and Finance Association noted that there is still no single industry definition of ‘sustainability’ or consensus on defining greenwashing.
For cross-border firms, there are also challenges with managing the divergence between the nuances of UK-based SDR and the EU’s Sustainable Finance Disclosure Requirement (SFDR). Additionally, firms are expected to gather sustainability data on a broad range of topics for consumer, product, and entity-level disclosures. But sustainability data beyond climate-related metrics is still not consistently available or robust.
CEN Group offers a tailored pathway to help asset and wealth managers navigate through this uncertainty. We can leverage on our expertise and experience supporting investment firms in complying with regulations such as the TCFD requirements, the Stewardship Code and SFDR to ensure that your transition to the SDR regime is aligned with all stakeholder requirements. Ultimately, we believe that greater disclosure can be a source of competitive advantage through improved business resilience and the trust it promotes amongst stakeholders, be it regulatory bodies, retail investors or the general public. Please get in touch today if you would like to discuss how we can support your readiness for SDR.
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CEN helps businesses maximise their sustainability potential, performance, and ESG disclosure.
For more information about our services pertaining to carbon footprinting, Net Zero transition planning, or emissions target setting, please get in contact and our team would be happy to assist.
Jasper Crone: Director
Roger Johnston: Director
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