Guiding Principles in ESG and sustainable finance – FCA publishes multi-firm review findings – 16 November 2023
The FCA has published the findings of its multi-firm review of how authorised fund managers (AFMs) comply with existing regulatory requirements and expectations on the design, delivery and disclosure of ESG and sustainable investment funds. This follows the FCA’s Dear Chair letter of July 2021, which established a set of guiding principles in these areas, as previously reported in this Bulletin.
TAFMs of varying sizes participated in the review, which focused on active and passive authorised retail funds whose names included a reference to ESG or sustainability-related terms. In summary, the FCA found that AFMs showed good intent to embed the guiding principles and had considered the design, delivery and disclosure of their ESG and sustainable funds through this lens. In some cases, however, the disclosure principle had not been fully embedded.
The FCA notes that embedding the guiding principles and the good practice identified in the findings will be a useful exercise to prepare for the FCA's proposed rules on sustainability disclosure requirements (SDR) and investment labels. The FCA will shortly publish a policy statement and final rules.
