31 May 2024 marked the coming into force of the FCA's new anti-greenwashing rules. These rules are part of a series of steps which the FCA is implementing to enhance transparency and trust whenever firms make sustainability-related claims. The Sustainability Disclosure Requirements (SDR) are part of a broader effort to support the UK government's commitment to a net zero economy by 2050 and align with other international sustainability disclosure initiatives. The FCA continues to develop the regime by considering extending its scope to other financial products and services, including financial advisers, portfolio managers (see below) and pension products.

Let us focus on the key dates and actions you need to be aware of to ensure your firm is well prepared.

Key dates to remember

• 31 May 2024: The FCA's anti-greenwashing rule is now in effect. This rule applies to all FCA-regulated firms and underscores the need for firms to ensure that sustainability-related claims are clear, fair and not misleading.
• 31 July 2024: Firms can start using sustainable investment product labels (there are four voluntary labels from which to choose) with accompanying disclosures. The sustainability objective should represent the aims of the overall product, with the threshold for all four labels being 70% of the gross value of the product's assets invested in line with its sustainability objective.
• 2 December 2024: Naming and marketing rules come into force for fund managers. Firms must ensure their product names and marketing materials accurately reflect their sustainability profile to avoid misleading consumers.
• 2 December 2024: This is the proposed date for the labelling regime and naming and marketing rules coming into force for portfolio managers. The FCA proposes to apply a broadly similar approach to labelling for portfolio managers as it is introducing for fund managers (noted above).
• 2 December 2025: Ongoing product and entity-level disclosures for firms with assets under management (AUM) worth more than £50 billion are required to become effective.
• 2 December 2026: Entity-level disclosure rules for firms with AUM worth more than £5 billion come into force.

While most of these requirements are focused on consumers, some also apply to institutional investors.

Why these dates matter

These dates represent the key milestones in the journey towards a more transparent and trustworthy sustainable investment market. Firms should prepare accordingly and be able to demonstrate their commitment to sustainability and, in turn, build investor confidence.

Actions for firms

• Review and update marketing materials: Ensure that all sustainability claims in your product names and marketing materials are substantiated and align with the new anti-greenwashing rules.
• Implement disclosures: Prepare to meet the consumer-facing and detailed disclosure requirements by the specified dates, providing clear and accessible information about your products' sustainability features.
• Monitor AUM thresholds: Keep track of your firm's AUM to determine when entity-level disclosures apply to you and start gathering the necessary data and information.

If you have any questions about how the SDR may impact your firm, or need further clarification on how to navigate these new requirements, our Dentons team is here to help.