The U.K. Financial Conduct Authority has published a discussion paper on its proposed Sustainability Disclosure Requirements and sustainable investment labels. The FCA is seeking initial views on these proposals with the intention of consulting on fuller policy proposals in Q2 2022. Responses to the discussion paper may be submitted until January 7, 2022. These proposals link to the U.K. government's ambitions on climate change and green finance, detailed in its October policy paper, Greening Finance: A Roadmap to Sustainable Investing, further details of which are set out in our related client note.
The FCA wishes to encourage the growing market in financial products that target sustainability objectives but is keen to ensure adequate regulation is in place. The discussion paper therefore proposes:
The disclosure rules will be aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures but will have a broader scope beyond climate change. The FCA is also seeking views on the extent to which the SDRs can remain consistent with the EU Sustainable Finance Disclosure Regulation, for the benefit of U.K. entities with cross-border business.
[View source.]