What are the Sustainability Disclosure Requirements (SDR) and investment labels?

Many investors want their money to do good, not just deliver a return. But it can be hard to tell if an investment actually has a positive social and environmental impact – or is just claiming to.

To minimise this ‘greenwashing’, and to increase trust and transparency for sustainable investments, the Financial Conduct Authority (FCA) have introduced the Sustainability Disclosure Requirements (SDR) and investment labels.

So, what are the requirements? First, any fund that claims to be sustainable needs to provide investors with a consumer-facing disclosure document. This short document helps you understand the investment's key sustainability features. You'll see a link to the SDR disclosure document on the webpage or app screen for any funds using sustainability-related terms in their naming and marketing.

Second, funds can also choose to use one of four sustainability labels. To qualify for a label, a fund must meet certain sustainability criteria. These labels are designed to make it easier for you to find an investment that matches your social and environmental values. Again, if a fund uses a sustainability label, you’ll see it on its webpage or app screen.

Keep in mind that SDR applies to UK-domiciled funds only.