FCA publishes guiding principles for ESG and sustainable investment funds

On July 19, 2021, the UK’s Financial Conduct Authority published guiding principles regarding the desired design, delivery and disclosure of environment, social and governance (ESG) and sustainable investment funds, after the FCA received a number of applications for the authorization of funds that fell short of expectations.  The guiding principles were written to the chairs of authorized fund managers to help firms apply existing ESG rules and ensure that ESG-related claims were clear and not misleading, in an effort to enable consumers to make informed decisions when it comes to ESG-related investment opportunities.  The FCA reports that ESG and sustainable investments are the fastest growing segment of the European funds market, and the guidance was intended to build consumer trust in this market and designed to complement recent proposals, published by the FCA, that addressed climate-related disclosure rules for listed companies and certain regulated firms.

FCA Press Release | FCA Letter FCA Chairs