By Victoria McCarron and Alex Gillespie

On 29 March 2023, the FCA gave an update on CP 22/20; its consultation on sustainability disclosure requirements (SDR) and investment labels. The consultation closed on 25 January 2023, with around 240 written responses received. In its update, the FCA sets out some of the feedback on its proposals as well as next steps, including the timing of its Policy Statement.

The FCA now intends to publish the Policy Statement in Q3 of this year. This is later than the FCA’s initial intention to publish final rules by the end of the first half of 2023. The delay is to allow the FCA to take account of the significant responses it has received.

The FCA says that it is carefully considering this feedback to ensure that first and foremost the regime protects consumers, but also recognises and takes account of any practical challenges that firms may have. This includes:

• Considering its approach to the marketing restrictions;
• Refining some of the specific criteria for the investment labels; and
• Clarifying how different products, asset classes and strategies can qualify for a label, including multi-asset and blended strategies.

When the FCA publishes its Policy Statement, it will also clarify matters such as that primary and secondary channels for achieving sustainability outcomes are not prescribed, and that the FCA does not require independent verification of product categorisation to qualify for a label.

For further information, a copy of the FCA’s update can be found here. For further sustainable finance updates, please visit the Burges Salmon blog.