FCA · investment-product regime
FCA SDR and the anti-greenwashing rule: what applies now
The FCA’s SDR regime governs how investment products are labelled, named, marketed and disclosed as sustainable, through rules in the ESG sourcebook.
Beside it sits the anti-greenwashing rule, ESG 4.3.1R, which binds every FCA-authorised firm, not only fund managers.
This page states each rule at its provision as at 30 September 2026, including the changes that took effect on 25 September.
ESG 4.3.1R
The anti-greenwashing rule, and its four limits
The rule applies to all firms, whether or not they do sustainability business, under ESG 3.1.2R(1).
It was made on 28 November 2023 and, by ESG TP 1.8R, applies from 31 May 2024.
It is gated to the UK: it covers a firm communicating with a client in the UK about a product or service, or communicating or approving a financial promotion to a person in the UK.
Excluded communications and third-party prospectuses are carved out on the face of the rule.
It does not reach claims a firm makes about itself as a firm: FG24/3 ¶2.15 sends those to the Principles, the Consumer Duty and the CMA and ASA guidance.
FG24/3 is guidance, finalised on 23 April 2024, and it “does not create new obligations”; it is sometimes misnumbered as FG24/2, which is unrelated mortgage guidance.
Unauthorised firms are outside the rule, which covers products and services that FCA-authorised firms make available to UK clients.
“A firm must ensure that any reference to the sustainability characteristics of a product or service is: (a) consistent with the sustainability characteristics of the product or service; and (b) fair, clear and not misleading.”
Source: ESG 4.3.1R(2)
ESG 4.1 and 4.2
The four labels: a prohibition with a carve-out
ESG 4.1.1R(1) forbids any firm to use the four labels, and ESG 4.1.1R(2) lets a manager use one from 31 July 2024 where the product meets the criteria.
So using a label without qualifying breaches a prohibition; it is not merely a missed opportunity.
The general criteria in ESG 4.2.4R require a clear, specific and measurable sustainability objective, and at least 70% of the gross value of the product’s assets invested in line with it.
The assets are selected against a robust, evidence-based standard that is an absolute measure of sustainability, and the manager’s assessment must be independent of its investment process.
Only certain managers may use a label — UK UCITS management companies, some ICVCs, and full-scope and small authorised UK AIFMs — and they notify the FCA rather than seek approval.
A manager must not claim that the FCA has approved its label, and in February 2026 the FCA published further examples of good and poor labelling practice.
| Label | Its specific test |
|---|---|
| Sustainability focus | Assets that are sustainable (ESG 4.2.13R) |
| Sustainability improvers | Assets with the potential to improve, with targets (ESG 4.2.14R–4.2.15R) |
| Sustainability impact | A pre-defined, positive, measurable impact and a theory of change (ESG 4.2.16R–4.2.17R) |
| Sustainability mixed goals | Two or more of the above (ESG 4.2.18R–4.2.19R) |
ESG 4.3.2R to 4.3.6G
Thirteen restricted terms, three of them label-only
The naming and marketing rules apply to a manager doing sustainability business for retail clients that uses a restricted term in a product’s name or in a financial promotion about its sustainability characteristics.
The last item on the list is open-ended, so the list is never closed.
An unlabelled product may use ten of the terms under ESG 4.3.5R, if its name accurately reflects genuine sustainability characteristics and the manager publishes the required disclosures and the statement “This product does not have a UK sustainable investment label”.
It may not use “sustainable”, “sustainability” or “impact”, and a manager using the focus, improvers or mixed goals label may not use “impact” in the name either (ESG 4.3.4R(2)).
For unlabelled products the FCA’s 70% figure is guidance and an example (ESG 4.3.6G(1)); for labelled products it is a rule.
The rules applied from the earlier of first label use or 2 December 2024, a longstop under ESG TP 1.9R rather than a start date.
From 25 September 2026, ESG 4.3.2R(3)(c) adds a third permitted use: a manager may use the terms where needed to meet the new climate-risk communication rule, ESG 2.3.1BR.
ESG 4.3.2R(2)
“ESG” · environment, environmental or environmentally · social or socially · climate · sustainable or sustainability · green · transition · net zero · impact · responsible · sustainable development goals or SDG(s) · Paris-aligned · and any other term implying sustainability characteristics.
Source: ESG 4.3.2R(2)
ESG 5
The disclosures, and when they fall due
| Disclosure | Triggered by | Timing |
|---|---|---|
| Consumer-facing disclosure (no more than two pages of A4) | Using a label or a restricted term | Kept current; reviewed at least annually |
| Pre-contractual disclosure | Using a label or a restricted term | In the product’s pre-contractual material |
| Product-level sustainability report (Part B) | Using a label or a restricted term | Within 16 months of first use; 30 June 2026 longstop for managers that started before 28 February 2025 |
| Entity-level report (four pillars) | Regardless of labels or terms | Enhanced SM&CR managers by 2 December 2025; others with £5bn or more under management by 2 December 2026 |
| Exemption | Assets under management below £5bn, three-year rolling average | ESG 3.1.3R |
Using the words is enough to trigger the product disclosures, and the entity report applies whether or not a label or term is used.
The 16-month window replaced an original 12 months in December 2025; a summary written from the 2023 policy statement, PS23/16, will show the old figure.
What changed on 25 September 2026
FCA 2026/59 and the product-level TCFD report
The FCA’s other autumn instrument is not about SDR labels but about the older TCFD regime for asset managers, life insurers and FCA-regulated pension providers.
FCA 2026/59, which finalised CP26/17, was made on 24 September 2026 and came into force on 25 September 2026.
It replaced product-level TCFD reporting with two rules in ESG 2.3.
ESG 2.3.1BR: a firm periodically considers whether climate-related risks could be materially relevant to a product, and includes any it identifies in retail communications about the product’s risk and return.
ESG 2.3.5AR: on request from a client or person who needs it for their own climate disclosure obligations, the firm provides at least Scope 1, 2 and 3 emissions data, for one request per product per calendar year.
The TCFD entity report under ESG 2.2 survives, and a firm also in scope of the listing rules may cross-refer from it to its UK SRS disclosures.
- 28 Nov 2023PS23/16 and the ESG sourcebook rules made
- 31 May 2024Anti-greenwashing rule applies
- 31 Jul 2024Labels usable
- 2 Dec 2024Naming and marketing longstop
- 2 Dec 2025First entity reports, enhanced firms
- 25 Sep 2026FCA 2026/59 in force
Product-level TCFD replaced.
- 2 Dec 2026First entity reports, other in-scope managers
Scope
Where SDR stops, and the anti-greenwashing rule does not
SDR’s labels, naming and marketing, and disclosure rules apply to UK funds and their managers.
Overseas funds are outside them, and the rules require such a product to carry the notice that it “is based overseas and is not subject to UK sustainable investment labelling and disclosure requirements” (ESG 4.1.19R).
The FCA consulted in CP24/8 on extending SDR to portfolio management, then decided in February 2025 that it was “not the right time to finalise” those rules; no date has been set.
The anti-greenwashing rule already applies to portfolio managers, because it applies to all authorised firms.
The FCA’s own summary of the regime is its SDR regime page, and every date across UK regimes is on the UK sustainability regulation timeline.
Two regimes
SDR and UK SRS: products and companies
| SDR | UK SRS under the FCA’s listing rules | |
|---|---|---|
| About | Investment products and the claims made about them | A company’s own sustainability-related financial disclosures |
| Rulebook | ESG sourcebook, ESG 4 and 5 | UK Listing Rules, UKLR 6.6.6R and parallels |
| Who | Fund managers; the anti-greenwashing rule reaches all authorised firms | Companies listed in UKLR 6, 14, 15, 16 and 22 |
| Basis | Rules, labels voluntary | Comply or explain, from periods beginning on or after 1 January 2027 |
| Standards | FCA criteria | UK SRS S1 and S2, published by DBT on 25 February 2026 |
The two are easy to confuse because the FCA publishes both under similar headings.
UK SRS S1 and the climate standard in UK SRS S1 and S2 are the standards a listed company reports against, and the listing rules that apply them are set out on UK SRS and the FCA.
The FCA consulted on those rules in CP26/5, and the government consulted on the standards themselves in its exposure-draft consultation.
A listed asset manager can be subject to both: SDR for its funds, UK SRS for itself.
The wider picture of company-level reporting is on ESG reporting and UK sustainability reporting.
Frequently asked
SDR and greenwashing, answered
What is the FCA’s SDR?
The Sustainability Disclosure Requirements are the FCA’s rules on how investment products are labelled, named, marketed and disclosed as sustainable.
They sit in the ESG sourcebook: four voluntary labels, naming and marketing rules for thirteen restricted terms, and consumer-facing, product-level and entity-level disclosures.
The anti-greenwashing rule sits alongside them and applies to every authorised firm.
What is the anti-greenwashing rule?
ESG 4.3.1R.
A firm must ensure that any reference to the sustainability characteristics of a product or service is consistent with those characteristics and fair, clear and not misleading.
It was made on 28 November 2023 and applies from 31 May 2024, to all FCA-authorised firms communicating with clients in the UK or communicating or approving a financial promotion to a person in the UK.
Does the anti-greenwashing rule cover what a firm says about itself?
No. The FCA’s guidance, FG24/3, says the rule relates to products and services.
Sustainability claims a firm makes about itself as a firm are governed by the FCA’s Principles, the Consumer Duty where relevant, and the CMA and ASA green claims guidance.
What are the four SDR labels?
Sustainability focus, Sustainability improvers, Sustainability impact and Sustainability mixed goals.
ESG 4.1.1R prohibits any firm from using them, then lets a qualifying manager use one from 31 July 2024 if the product meets the ESG 4.2 criteria, including at least 70% of gross asset value invested in line with its sustainability objective.
The manager notifies the FCA; the FCA does not approve labels.
Can a fund without a label use “sustainable” in its name?
No. Thirteen terms are restricted by ESG 4.3.2R(2).
An unlabelled product may use ten of them if it meets ESG 4.3.5R, but not “sustainable”, “sustainability” or “impact”.
A fund using the focus, improvers or mixed goals label may not use “impact” in its name either.
What changed for asset managers in September 2026?
FCA 2026/59, in force on 25 September 2026, replaced product-level TCFD reporting with two narrower rules: ESG 2.3.1BR on climate risks in retail communications, and ESG 2.3.5AR on providing Scope 1, 2 and 3 data on request.
The TCFD entity report survives.
It also allows the restricted sustainability terms to be used where needed to meet ESG 2.3.1BR.
Does SDR apply to portfolio management and overseas funds?
The labelling, naming and marketing and disclosure rules do not apply to portfolio management: the FCA decided in 2025 it was not the right time to finalise that extension.
Overseas funds are outside the labelling and disclosure rules.
The anti-greenwashing rule, by contrast, applies to all authorised firms, portfolio managers included.
How is SDR different from UK SRS?
SDR governs investment products and the firms that make them available.
UK SRS governs a company’s own sustainability-related financial disclosures; the FCA’s final rules in PS26/19 require listed companies to report against it on a comply-or-explain basis from 2027.
A listed asset manager can be subject to both.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- FCA HandbookESG 4.3 — naming and marketing, including the anti-greenwashing rule ESG 4.3.1R
The anti-greenwashing rule, the thirteen restricted terms (ESG 4.3.2R(2)), the unlabelled route (ESG 4.3.5R) and the “impact” bar (ESG 4.3.4R(2)).
- FCA HandbookESG 4.1 — sustainability labels
The prohibition on the four labels (ESG 4.1.1R(1)) and the carve-out from 31 July 2024 (4.1.1R(2)).
- FCA HandbookESG 4 — sustainability labels, naming and marketing
The label criteria in ESG 4.2, including the 70% asset test.
- FCA HandbookESG 5 — disclosure
Consumer-facing, pre-contractual, product-level and entity-level disclosures, and their timing in ESG 5.4.3R.
- FCA HandbookESG sourcebook
ESG 3.1.2R(1): the anti-greenwashing rule applies to all firms; ESG TP 1.8R and 1.9R set the dates.
- FCA HandbookESG 2.3 — product-level reporting, as amended 25 September 2026
ESG 2.3.1BR and 2.3.5AR, which replaced product-level TCFD reporting.
- FCA HandbookESG 2.2 — TCFD entity report
The asset-manager entity report that survives FCA 2026/59.
- Financial Conduct AuthorityHandbook Notice No 144 (September 2026)
FCA 2026/59, made 24 September 2026, in force 25 September 2026.
- Financial Conduct AuthoritySustainability Disclosure Requirements (SDR) regime
The FCA’s own summary, including the further examples of good and poor labelling practice published in February 2026.
- Financial Conduct AuthorityPS23/16: Sustainability Disclosure Requirements (SDR) and investment labels
What the FCA decided in November 2023, and why; the rules in force are the Handbook’s.
- Financial Conduct AuthorityFG24/3: finalised non-handbook guidance on the anti-greenwashing rule (PDF)
¶2.15: claims a firm makes about itself fall under the Principles, the Consumer Duty and CMA and ASA guidance, not ESG 4.3.1R.
- Financial Conduct AuthorityCP24/8: extending SDR to portfolio management
The FCA decided it was “not the right time to finalise” the extension.
- Financial Conduct AuthorityCP26/17: Quarterly Consultation Paper No. 52, Chapter 2
The consultation FCA 2026/59 finalised.
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