On 9 September 2024, the UK’s Financial Conduct Authority (FCA) announced temporary flexibility for firms struggling to comply with the new ‘naming and marketing’ rules under the Sustainability Disclosure Requirements (SDR). These rules, aimed at enhancing ESG regulatory compliance, are part of a broader effort to combat greenwashing and improve transparency in sustainability-related investment products. 

The FCA’s anti-greenwashing rule came into effect on 31 May 2024, and from 31 July, UK-based investment fund managers could begin using investment labels on their products. Full compliance with the ‘naming and marketing’ rules is required by 2 December 2024. However, some firms have encountered challenges in meeting the stricter standards and require additional time to ensure proper ESG disclosures. 

In response, the FCA is offering limited flexibility until 2 April 2025 for firms that meet specific criteria, such as submitting an application for approval by 1 October 2024 and currently using sustainability-related terms in their fund names. While this extension allows for more time, the FCA expects firms to comply as soon as possible and without unnecessary delay. 

This move highlights the importance of ESG regulatory compliance in the financial sector, as firms must navigate evolving requirements while maintaining transparency for investors. The FCA’s support underscores its commitment to ensuring the integrity of sustainability claims while offering firms the chance to align with the SDR’s higher standards. 

Sources: 

https://www.regulationtomorrow.com/eu/fca-sets-out-temporary-measures-for-firms-on-naming-and-marketing-sustainability-rules/ 

https://www.google.com/url?rct=j&sa=t&url=https://www.complianceweek.com/regulatory-policy/fca-delays-compliance-date-for-certain-parts-of-esg-rule-package/35346.article&ct=ga&cd=CAEYACoTNzQwMzI3MjM3NTE1NDg4NDU2MzIaOWJkYzgzYWFhNzEyMzc3Zjpjb206ZW46VVM&usg=AOvVaw3qmIRTmcI4oBdnnFlr23m1 

https://www.esgtoday.com/fca-delays-implementation-of-sdr-sustainable-fund-labeling-rules-to-april-2025/ 

https://www.lexology.com/pro/content/fca-delays-sustainability-requirements