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Sustainable Disclosure Requirements: the FCA aims to provide greater clarity to tackle greenwashing

Updated: Jan 5, 2023

Last month the FCA published its consultation (CP22/20) on the Sustainability Disclosure Requirements and investment labels for the UK market.


The aim of the consultation is to provide greater clarity and harmonisation on the rules for products which are marketed as sustainable in the UK. Additionally, the consultation supports the UK Government’s Roadmap to Sustainable Investing working towards a transition to a net zero economy.



All FCA regulated firms will fall under these "anti-greenwashing" requirements. These firms will be responsible for their own labelling and will do so on a voluntary basis in order to both protect consumers and improve consumer trust in sustainable investment products.


The consultation proposes to introduce the following requirements:

  • Sustainable investment labels that will give consumers the confidence to choose the right products for them.

    • The proposed three categories of mutually exclusive labels are sustainable focus, sustainable focus and sustainable impact

  • Restrictions on how certain sustainability-related terms – such as ‘ESG’, ‘green’ or ‘sustainable’ – can be used in product names and marketing for products.

  • Consumer-facing disclosures to help consumers understand the key sustainability-related features of an investment product

  • More detailed disclosures, suitable for institutional investors or retail investors who want to know more.

  • Requirements for distributors of products, such as investment platforms, to ensure that the labels and consumer-facing disclosures are accessible and clear to consumers.

Sacha Sadan, the FCA’s Director of Environment Social and Governance, commented:

Greenwashing misleads consumers and erodes trust in all ESG products. Consumers must be confident when products claim to be sustainable that they actually are. Our proposed rules will help consumers and firms build trust in this sector.

Firms should therefore act to understand the nature of their products in the context of the Sustainable Disclosure Requirements and determine which requirements will apply to them


The consultation is open until 25 January 2023. The regulator intends to publish final rules by the end of the first half of 2023.

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