EcoActive’s Post

An update from the FCA on compliance with the ESG rules, granting some temporary flexibility for compliance with the "naming and marketing" rules for those firms that may need additional time to operationalise the required changes. This extension until April 2025 reflects the FCA's commitment to a pragmatic approach, recognising that that is has taken longer than expected for some firms to meet the higher standards. https://lnkd.in/e6eu4VjD

France’s financial regulator has called for caution in sustainable fund marketing to avoid “major greenwashing risks” after analysing 52 sustainable thematic funds. The Autorité des marchés financiers (AMF) – France said it observed “inadequacies” in the funds’ compliance with the regulator’s minimum standards for non-financial criteria – effectively its national rules for ESG terms in fund names – and urged managers to ensure the marketing of funds is “correct, clear and not misleading”. A spokesperson for the AMF told Responsible Investor that for funds to be aligned with its guidance, sustainability claims must be backed by a “measurable and binding commitment” in the legal documentation in order to be used as part of the marketing communications. The study found that 28 percent of the funds analysed breached the AMF’s minimum standards, which were introduced in 2020. Shortcomings included issues with the data used by funds to back up their sustainability claims in various materials. The regulator said discussions have been initiated with stakeholders based on these findings. It noted that all funds that did not meet the criteria are domiciled overseas. #SustainableInvesting #SDGs #SFDR

#RegCentre 📣 𝐇𝐨𝐭 𝐨𝐟𝐟 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐬 📣 𝐅𝐂𝐀 𝐬𝐞𝐭𝐬 𝐨𝐮𝐭 𝐭𝐞𝐦𝐩𝐨𝐫𝐚𝐫𝐲 𝐦𝐞𝐚𝐬𝐮𝐫𝐞𝐬 𝐟𝐨𝐫 𝐟𝐢𝐫𝐦𝐬 𝐨𝐧 ‘𝐧𝐚𝐦𝐢𝐧𝐠 𝐚𝐧𝐝 𝐦𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠’ 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐫𝐮𝐥𝐞𝐬 The FCA has announced today that it is offering limited temporary flexibility, until 5pm on 2 April 2025 (deadline was 2nd December 2024), for firms to comply with the ‘naming and marketing’ rules in relation to a sustainability product w̳h̳i̳c̳h̳ ̳i̳s̳ ̳a̳ ̳U̳K̳ ̳a̳u̳t̳h̳o̳r̳i̳s̳e̳d̳ ̳i̳n̳v̳e̳s̳t̳m̳e̳n̳t̳ ̳f̳u̳n̳d̳ ̳i̳n̳ ̳e̳x̳c̳e̳p̳t̳i̳o̳n̳a̳l̳ ̳c̳i̳r̳c̳u̳m̳s̳t̳a̳n̳c̳e̳s̳ ̳w̳h̳e̳r̳e̳ ̳t̳h̳e̳ ̳f̳i̳r̳m̳:̳ 1. has submitted a completed application for approval of amended disclosures in line with ESG 5.3.2R for that fund by 5pm on 1 October 2024; a̳n̳d̳ 2. is currently using one or more of the terms ‘sustainable’, ‘sustainability’ or ‘impact’ (or a variation of those terms) in the name of that fund and is intending either to use a label, or to change the name of that fund Note, these temporary measures do not apply to funds using other sustainability-related terms in their names that are not specified above. For more details see: https://lnkd.in/etrQzkvy

FCA finalises sustainability disclosure rules to tackle greenwashing The UK Financial Conduct Authority (FCA) has published a policy statement confirming the final rules under the Sustainability Disclosure Requirements (SDR) and investment labels regime. Released in November 2023, this regime forms part of the FCA’s broader environmental, social, and governance (ESG) initiative and aligns with international measures, including the EU Sustainable Finance Disclosure Regulation and the Securities and Exchange Commission’s (SEC’s) climate-related disclosure rules. ACA Group, a RegTech offering scalable compliance, risk and technology solutions, recently delved into the FCA’s sustainability disclosure requirements and what firms need to know. Read the full story here: https://lnkd.in/gjHaYWCU #RegTech #Compliance #FinTech

BDO’s National Leader for Sustainability, IFRS & Corporate Reporting, Aletta Boshoff, featured in an article in The Australian this week, explaining how organisations can steer clear of making misleading ESG claims - also known as 'greenwashing'. “When organisations make claims that are false, or even unintentionally misleading, people and entities might make purchasing decisions they may not otherwise have made,” said Aletta. “This can have various impacts, from financial to environmental, reputational, and – ultimately – trust.” She advised that when consumers or investors are looking at marketing materials related to the environmental performance or impacts of a product, they should consider three things: 🟢 Is the statement accurate? Can it be verified? 🟢 If the statement relates to future goals – is there a plan to achieve this? 🟢 Could the statement be considered vague, misleading, an exaggeration, or an overstatement? Subscribers to The Australian can read the full article: https://lnkd.in/g2T35gp3

On 8 March 2024, Vanguard investments admitted to engaging in conduct that potentially mislead the public and that it had made representations that were false or misleading about certain environmental, social and governance (ESG) exclusionary screens applied to investments in a Vanguard index fund #greenwashing. The Court will consider the appropriate penalty to impose for the conduct, on 1 August 2024. Why Vangaurd? Vanguard promised its investors and potential investors that the product would be screened to exclude bond issuers with significant business activities in certain industries, including fossil fuels, when this was not always the case. Potential Red Flags: Use of terminology such as “net zero statements and targets”, “carbon neutral" and "clean or green” in product disclosure statements (PDSs), advertisements, websites and other market disclosures can trigger reactive suvelliance by #ASIC. So what can you do? Use of emerging technologies such as artificial intelligence (AI), blockchain, Internet-of-Things (IoT), and sensor technologies to combat potential greenwashing. Used case study: Singapore is the first country to use AI utility tool named NovA!, to help financial institutions (FIs) assess the sustainability performance of Singapore’s real estate sector. FIs would be able to use NovA! for their #ESG risk assessment for originating, underwriting and servicing of sustainability linked to loans. Read more here: https://lnkd.in/gYBXyd5c #FinancialCrimePrevention #Governance #compliance

🌳 Understanding the New Sustainability Disclosure Requirements (SDR) If you have heard about the new Sustainability Disclosure Requirements (SDR) being introduced by the Financial Conduct Authority (FCA) but aren’t quite sure what they are and how they will impact the financial advice industry, this article is for you. In it we delve into... • The necessity of new regulations to combat greenwashing and ensure transparency in financial products • The timeline and implementation phases for the new SDR regulations • An explanation of the four new sustainability investment labels • The impact of SDRs on investment options and the challenges they present • How Holden & Partners is adapting to these changes and ensuring we comply and keep clients informed Read the full article here https://lnkd.in/exyyky7D #SustainableInvesting #SDR #financialadvice

2024 is shaping up to be a key year for ESG with many of the requirements set out by the FCA in both its policy statement on Sustainability Disclosure Requirements (SDR) and investment labels (PS 23/16) and anti-greenwashing rules (GC23/3) coming into force. Now’s therefore the time for applicable firms to start considering how they may be impacted and make plans for implementing any changes. We have outlined the changes in this article: https://lnkd.in/eKyzvkah If you would like to know more, please reach out to me, Darren M. or Mark Stewart. #esg #fca #sdr #sustainableinvestment #compliance

Last year saw the responsible investment space buzzing with new regulations and standards. The Financial Conduct Authority (FCA) introduced its Sustainability Disclosure Requirements (SDR), while the International Sustainability Standards Board (ISSB) published the first set of standards. However, there were some concerns about the criteria for determining funds' sustainability disclosures. The European Commission ended the year by seeking consultation on whether the Sustainable Finance Disclosure Regulation (SFDR) should become a formal sustainability classification system. Learn more: https://bit.ly/3HHR1Pq If you would like support on any of these challenges or are starting to think about how to transform your business to align with upcoming changes, please get in touch at [email protected]. #Sustainability #ESG #SDR #SFDR

Our own Volker Lainer discusses the adoption and use of AI in ESG for 2024 in this great outlook piece by ESG Clarity. Read the full article below