Sustainable investment label

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Investment - sustainability - green finance - social concerns.

A sustainable investment label is a designation of an investment product to indicate its alignment with sustainability purposes.


Sustainable investment labels - Financial Conduct Authority (FCA) consultation
"There will be three sustainable investment labels: sustainable focus, sustainable improvers, and sustainable impact. These are simplified from original proposals for five categories.
To apply the sustainable focus label, investment managers must evaluate assets to determine their sustainable credentials. For the sustainable improvers label, firms must state, in a measurable way, how the sustainability potential of the asset will be achieved. Lastly, the sustainable impact label covers assets that address environmental or social problems in underserved markets, or those that address observed market failures...


Restrictions will apply to all products and only labelled funds will be allowed to use designated words and phrases, including sustainable, environmental, social, and governance (ESG), impact, responsible, green, Sustainable Development Goals (SDG), Paris-aligned.
Each sustainable investment label will be underpinned by a set of criteria covering investment policy and strategy, key performance indicators, firm-level attributes, and investor stewardship. They will also be voluntary and should only be used by firms for products that meet the prerequisite criteria.
However, firms choosing not to use them will still have to produce detailed sustainability disclosures at product and entity level, in accordance with the FCA’s proposal for a general anti-greenwashing rule, which aims to ensure that the naming and marketing of financial products in the UK is clear, fair, and not misleading."
Principles for Responsible Investment - blog - 12 January 2023.


See also


Other resource