In response to growing consumer demand, firms are providing an increasingly diverse range of products that target various sustainability objectives, themes or characteristics. FCA acknowledges that there is also a risk of harm if the market responds to rising demand without adequate regulatory checks and balances and delivers poor outcomes to consumers.
FCA wants consumers to have enough information to assess which products meet their needs and hold firms to account for their sustainability claims. To help inform FCA’s work, its discussion paper (DP) sought feedback on potential approaches to the design of:
- sustainable investment labels;
- consumer-facing disclosures for investment products; and
- client- and consumer-facing entity- and product-level disclosures by asset managers and FCA-regulated asset owners.
FCA aimed to consult on sustainability disclosure requirements and investment labels in Q2 of 2022, however it is now planning to consult in the autumn, to allow it to take account of other international policy initiatives and ensure stakeholders have time to consider these issues.