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FCA Sustainability Disclosure Requirements & investment labels (SDR)

FCA PS23/16 — ESG Sourcebook

In forceApplies 2024-05-31Verified 2026-08-25

Scope

FCA-authorised firms (Dictionary termAnti-greenwashing ruleAn anti-greenwashing rule is a regulatory or supervisory requirement intended to prevent misleading sustainability claims in financial products, services or communications.Read the full definition : all); UK fund managers (labels/naming)

Penalties

FCA supervision; DMCC Act 2024 gives CMA parallel direct-fining power up to 10% of global turnover for consumer claims

Last verified

2026-08-25

In plain language

What this law does

Dictionary termFund labellingFund labelling is the classification or naming of investment funds according to sustainability characteristics, objectives or regulatory categories.Read the full definition regime with four labels (Focus, Improvers, Impact, Mixed Goals) each requiring ≥70% of assets meeting the Dictionary termSustainabilityThe capacity to maintain valued social, ecological and economic functions over time without depleting the foundations on which they depend or shifting unacceptable costs to others.Read the full definition objective, plus naming/marketing gates for ESG terms and product/entity-level disclosures.

Formal requirements

What the law requires

Reviewed provisions grouped by practical purpose. Use the official text for the full legal context.

Who and what it covers

  1. Dictionary termSustainabilityThe capacity to maintain valued social, ecological and economic functions over time without depleting the foundations on which they depend or shifting unacceptable costs to others.Read the full definition Focus, Improvers and Impact labels — Improvers requires a credible transition/engagement pathway; Impact requires pre-defined, measurable positive environmental/social impact (Dictionary termContributionA substantiated causal role played by an intervention within a wider set of influences, supported by a credible theory of change and evidence that expected mechanisms operated.Read the full definition theory).

    FCA Sustainability Disclosure Requirements (PS23/16) · instrument-level citation

Disclosure requirements

  1. Dictionary termSustainabilityThe capacity to maintain valued social, ecological and economic functions over time without depleting the foundations on which they depend or shifting unacceptable costs to others.Read the full definition -related naming rules — from 2 Dec 2024, sustainability-related terms in fund names/marketing require a label or the "unnamed products" disclosure conditions.

    FCA Sustainability Disclosure Requirements (PS23/16) · instrument-level citation

  2. Product-level metrics — mandatory consumer-facing + pre-contractual + ongoing product and entity-level reports (Scope 1/2/3, producer-level disclosures on AuM basis).

    FCA Sustainability Disclosure Requirements (PS23/16) · instrument-level citation

Metrics and KPIs

  1. 70% threshold — at least 70% of assets must meet the product's Dictionary termSustainabilityThe capacity to maintain valued social, ecological and economic functions over time without depleting the foundations on which they depend or shifting unacceptable costs to others.Read the full definition objective (credible standard) for any label.

    FCA Sustainability Disclosure Requirements (PS23/16) · instrument-level citation

Dictionary

Key terms for this law

Terms with a retained, published connection to this legal source.

Claims

Explore claims affected by this source

Search or filter the reviewed connections, then open one claim for its full market-by-market assessment.

  • 1.5°C-aligned” / “Paris-aligned
    Why this claim is connected

    Credible Dictionary termTransition planA time-bound strategy linking an organisation's current business model to a climate-aligned future through targets, actions, governance, resources, dependencies and transparent progress.Read the full definition ; no implied official Dictionary termCertificationA third-party attestation that a product, process, service, system or person fulfils specified requirements within a defined scope.Read the full definition

  • “Sustainable fund” (product name)
    Why this claim is connected

    Label + 70% test + consumer-facing disclosures; ESG 4.3 Dictionary termAnti-greenwashing ruleAn anti-greenwashing rule is a regulatory or supervisory requirement intended to prevent misleading sustainability claims in financial products, services or communications.Read the full definition

  • ESG fundDictionary termESG fundAn investment fund that applies ESG criteria in its strategy — classified in the EU under SFDR Article 6, 8 or 9.Read the full definition
    Why this claim is connected

    Label or unnamed-product conditions

  • Impact fund
    Why this claim is connected

    Impact thesis, measurement framework, 70% test

  • Paris-aligned fund
    Why this claim is connected

    Label/conditions; methodology disclosure

  • Article 9 product
    Why this claim is connected

    Use SDR label framework

  • Sustainability-linked bond — ambitious SPTsDictionary termSustainability-linked bondA bond whose coupon or other terms change depending on whether the issuer meets predefined sustainability targets — proceeds are general-purpose, so the targets carry the credibility.Read the full definition
    Why this claim is connected

    SPT credibility evidence; coupon-step mechanics disclosed.

  • ESG-screened portfolio
    Why this claim is connected

    Screen criteria disclosed; name gated to label conditions.

  • Sustainable company
    Why this claim is connected

    Whole-business claim needs whole-business Dictionary termSubstantiationThe documented body of relevant, reliable and current evidence that supports the exact wording, scope, comparison and overall impression of a claim before and while it is communicated.Read the full definition