James Corah, Head of Sustainability at CCLA, has declared approval of the relaxing of the upcoming Sustainability Disclosure Requirements (SDR) for asset managers, announcing that the FCA’s decision is ‘good news’ for the charity investment firm. 

Initially, multi and mixed-asset funds were not eligible to be included in the new regime. After a formal consultation period with asset managers, which ended in January, FCA responded to concerns around the scope of products that could be labelled and marketed sustainably by broadening it to include multi-asset and blended strategies.   

Corah had reasoned that an impactful multi-asset fund could assume both a ‘sustainable improver’ approach to listed equity investment, and a ‘sustainable impact’ approach to alternatives, such as through financing renewable energy projects. 

The SDR are to be the UK’s equivalent to the European Sustainable Finance Disclosure Regulation (SFDR), although whilst the FCA has aimed for the two to be compatible, there are some questions around the complexities that will arise for the many organisations that will need to answer to both. At its core, the purpose of the SDR is to create a disclosure and labelling system for investment firms and products in order to improve market integrity, safeguard consumers, and decrease greenwashing. The SDR policy changes had initially been proposed to come out in Q2, but have been delayed to Q3 of this year. The preparations of Asset Managers have long begun in earnest, as they prepare themselves to align with the requirements that will be at both entity and product level.