New measures will give you better information on investments, to help you find funds that meet your sustainability objectives.
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If you've invested in funds that are described as sustainable, or are looking to invest, we're introducing several measures to give you better information on what you're investing in.
What this means for you
From 31 July 2024:
- you’ll start seeing labels on investment funds that have a specific environmental or social goal
- the label means you’ll have access to clear and simple information on what that goal is and the approach to achieving it, and you’ll get annual updates on progress towards it
- from 2 December 2024, if a fund doesn’t include a label but is making sustainability claims, you’ll have access to clear and simple information explaining how it’s invested and why it doesn’t have a label
Investment labels
There are 4 labels to help you recognise investment funds with different sustainability goals. Providers can choose to use any of these labels if their funds meet the criteria, but they don't have to.
The labels are:
Sustainability Focus: these funds invest mainly in assets that focus on sustainability for people or the planet. Examples may include activities to support the production of energy, for example, from solar, wind or hydrogen.
Sustainability Improvers: these funds invest mainly in assets that may not be sustainable now, but aim to improve their sustainability. Examples may include investments in companies that are on a credible path to net zero by 2050, or are committed to improving social standards such as human rights.
Sustainability Impact: these funds invest mainly in solutions to sustainability problems with an aim to achieve a positive impact for people or the planet. Examples may include renewable energy generation and social housing.
Sustainability Mixed Goals: these funds invest mainly in a mix of assets that either focus on sustainability, aim to improve their sustainability over time, or aim to achieve a positive impact for people or the planet. Examples may include a mixture of investments from the labels above (Focus, Improvers and Impact).
Funds that have labels will also need to give you clear and simple information, including:
- what the sustainability goal of the fund is
- the approach to achieving it
- annual updates on progress towards the goal
Investment funds that don’t have labels
Some funds may not include a label but may still make sustainability claims, such as including ‘green’ or ‘low carbon’ in the name of the fund. This could be because:
- the provider has decided not to have a label
- the fund doesn’t meet the criteria to have a label
Where this is the case, you’ll still have access to clear and simple information about what the fund is investing in. You’ll also see a statement explaining why it doesn’t have a label.
Other funds may not include a label because the fund isn’t in scope of our regime. This includes funds that are based outside the UK or different types of funds such as pension funds.
Anti-greenwashing
Greenwashing is when providers, such as banks, fund managers or insurers, claim their products or services are doing more for people or our planet than they actually are.
We want to protect you against greenwashing, so we introduced an anti-greenwashing rule. This rule reinforces that sustainability-related claims must be fair, clear and not misleading.
This will make it easier for you to make informed decisions about which investment products meet your sustainability objectives.