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Response to FCA's publication of consultation on Sustainability Disclosure Requirements

26 October 2022 | London
Legal Briefings

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Responding to news that the Financial Conduct Authority has today published its consultation paper on sustainability disclosure requirements, Shantanu Naravane, senior associate in Herbert Smith Freehills's corporate practice, says:

"The significant emphasis placed by the FCA in the consultation paper on preventing greenwashing is a clear indicator of the regulatory focus on this issue - not only is the prevention of greenwashing the primary focus of the labelling and disclosure regime, but the FCA has also proposed a standalone anti greenwashing rule which applies to all UK authorised financial services firms
 
"Although the FCA's proposal are not inconsistent with the EU SFDR, the proposals are fundamentally different to the EU SFDR requirements. Therefore, any asset managers subject to both regimes will have to carry out distinct classification and disclosure exercises to ensure compliance with both
 
"The labelling and disclosure requirements are expected to start coming into force by mid-2024. However, given the degree of divergence with the EU regime and the far reaching scope of the FCA's proposals, asset managers and other financial services firms would be well advised to start scoping their existing and proposed product ranges to assess the potential impact of these proposals."

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