The UK is in the process of developing and implementing its Sustainability Disclosure Regulation which will mandate sustainability disclosures across the UK financial sector. The law comes with many obligations including greenwashing rules, investment labels, naming and marketing rules, and product and entity-level disclosures. The FCA published a guidance page setting out details and timelines for individual components of the legislation. Linklaters wrote an article on the new guidance and its advice for financial firms in the near term stating:
“The FCA sets out a non-exhaustive list of the steps firms should be taking now to prepare for the regime coming into effect. None of these expectations will come as any surprise to those familiar with the rules. Of particular note for distributors, the FCA reiterates the need to prepare to make the labels and consumer-facing disclosures available as soon as reasonably practicable to retail investors, and to keep them up to date following changes made by the firm.”
The article explains that the new guidance offers insights into how certain key terms and concepts will be interpreted by lawmakers, giving companies a better idea of what to expect from the final rules. The UK SDR is similar in nature to the EU’s SDR and will bolster transparency in sustainable finance. The SDR was designed using the ISSB standards, which should provide some familiarity to those acquainted with the standards.
If you aren’t already subscribed to our complimentary ESG blog, sign up here: https://practicalesg.com/subscribe/ for daily updates delivered right to you.