Investment Regime

FCA SDR and anti-greenwashing: the rules for sustainable investments

The FCA's Sustainability Disclosure Requirements govern how investment products are labelled and marketed as sustainable. Often confused with UK SRS, SDR applies to funds and asset managers, while UK SRS covers corporate reporting.

The four sustainability labels

From July 2024, in-scope funds that intentionally pursue positive environmental or social outcomes can adopt one of four sustainability investment labels — Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals — each with its own qualifying criteria and disclosure obligations 48. Adoption is voluntary but the criteria are strict, and many funds have changed their names as a result 48.

Naming and marketing rules

From 2 December 2024, only funds that have adopted an SDR label may use "sustainable", "sustainability" or "impact" in their name 48. Related terms such as "responsible" or "green" may still be used by non-labelled funds, but only where accurate and accompanied by consumer-facing disclosure — the rule that has driven widespread fund renaming 48.

The disclosure tiers

SDR layers disclosure by audience and firm size. Consumer-facing and pre-contractual disclosures apply when a fund uses a label or sustainability terms; ongoing product-level disclosures came into force on 2 December 2025; and entity-level reports — building on the TCFD/ISSB four-pillar structure — apply to asset managers with assets under management of £50bn or more from 2 December 2025, and to other in-scope firms above £5bn from 2 December 2026 48.

What is SDR?

The Sustainability Disclosure Requirements (SDR) are the FCA's rules for how investment products are labelled, named and marketed as sustainable. SDR applies to investment funds and asset managers to give investors clear information and prevent greenwashing.

What is the anti-greenwashing rule and when did it start?

The FCA's general anti-greenwashing rule took effect on 31 May 2024 and applies to all FCA-regulated firms. It requires that financial product naming and marketing be clear, fair, not misleading, and consistent with actual sustainability characteristics.

What are the four SDR labels?

From July 2024, eligible funds can adopt one of four sustainability investment labels: Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals. Each has specific qualifying criteria and disclosure obligations.

Can a fund use "sustainable" in its name?

From 2 December 2024, only funds that have adopted an SDR label may use "sustainable", "sustainability" or "impact" in their names. Related terms like "responsible" or "green" may still be used by non-labelled funds if accurate and properly disclosed.

How is SDR different from UK SRS?

SDR governs investment products (how funds are labelled and sold) and is overseen by the FCA. UK SRS governs corporate reporting (how companies disclose their own sustainability) and is the ISSB-aligned standard that the FCA proposes to make mandatory for listed companies.

Does SDR apply to portfolios or offshore funds?

SDR currently applies to UK-authorised funds and their managers. The FCA paused plans to extend to portfolio management in April 2025, and offshore funds are not yet in scope, though both extensions remain expected.

Related guides & references

Corporate Standards

UK SRS S1: General Sustainability Disclosures

Corporate sustainability reporting standard (distinct from SDR investment rules).

8 min readCorporate Standards

Corporate Standards

UK SRS S2: Climate-Related Disclosures

Corporate climate reporting standard (distinct from SDR investment rules).

12 min readCorporate Standards

Framework

ESG Reporting in the UK

Complete picture of UK ESG landscape including SDR's role in investment regulation.

10 min readFramework

Timeline

UK Sustainability Regulation Timeline

Master roadmap including SDR milestones and UK SRS deadlines.

12 min readTimeline

Overview

UK Sustainability Reporting Guide

Umbrella guide to UK sustainability reporting landscape.

15 min readOverview

Last verified May 2026Reviewed by UK SRS Investment Regulation Team

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