Askume, Sept 9 – Britain’s financial regulator said on Monday it had approved an extension to “naming and marketing” rules aimed at tackling “greenwashing”, with companies required to comply by April 2025.
It added that funds still need to submit applications by 1 October 2024 to comply with the UK’s Sustainability Disclosure Requirements (SDR) disclosure rules, but will now have additional time to change their name and comply with marketing requirements.
Regulators in the UK and across Europe are working to help investors align their money with environmental or social principles, requiring thousands of funds to be more transparent about their sustainability-related claims.
The SDR aims to protect consumers by ensuring that sustainable products and services on sale are accurately described and includes sustainability labels for funds, new reporting and disclosure requirements and rules to combat greenwashing .
The Financial Conduct Authority said in a statement that companies should take all reasonable steps to ensure compliance with naming, marketing and disclosure rules that will come into force on December 2.
It said the compliance extension was approved because some companies, particularly those wanting to use investment labels or needing to change product names, needed additional time to meet the higher standards and prepare the disclosures required for approval.
Oscar Warwick Thompson, policy director at the British Sustainable Investment and Finance Association, said the FCA had shown a pragmatic spirit, but warned this should not lead to complacency.
“We strongly encourage companies to maintain momentum during implementation and ensure high standards of disclosure for their customers,” he added.
Chris Cummings, chief executive of the Investment Association, said the move would “provide much-needed additional time for companies wishing to label funds to work with regulators to comply with the new rules”.
The new rules require that any references to environmental, social and governance (ESG) sustainability topics in products or services must be fair, clear and not misleading.
