“The four new fund labels – Sustainability Impact, Sustainability Focus, Sustainability Improvers and (less expected but no less welcome) Sustainability Mixed Goals - closes fund labelling loopholes that have left current reporting requirements open to manipulation and abuse by fund management companies.
As a member of the Disclosure and Labels Advisory Group we have seen first-hand the FCA’s commitment to stamping out Greenwashing, and we would urge the FCA and other regulators to go further in encouraging transparency in other areas of fund management, such as moving beyond published Top 10 Holdings to give a deeper and clearer picture of a fund’s underlying investments.
That said, we are encouraged that the FCA is considering extending these Sustainability Disclosure Requirements further - including to pension funds and other investment products - and that the critical role of financial advisers is acknowledged, with a new independent working group set up to respond to their unique role and challenges in advising on sustainable finance.
As positive impact investors, we’ve been investing in companies to achieve a measurable positive social/environmental impact alongside a financial return for almost 20 years. As such, we heartily welcome clear, evidence-backed distinctions on labelling sustainability investment funds.
We fervently believe the seismic shift away from a carbon-intensive economy to a net-zero economy represents a colossal opportunity for investors. Capital markets have an essential role to play in scaling new industries and adapting existing ones. Greenwashing does a disservice to individual investors, companies, financiers and society.”