IA responds to FCA consultation on SDR and investment labels
In response to the FCA's consultation on SDR and investment labelling, Chris Cummings, Chief Executive of the Investment Association (IA) said:
“As demand for sustainable and responsible investment products grows, our industry recognises that we must continue to raise standards and improve consumer confidence in this area of the market.
“An effective retail labelling system and clear disclosures can play a valuable role in achieving this. While we commend the FCA’s positive work to date, we are concerned that without changes, the proposals will result in an approach that does not serve consumers effectively or facilitate the transition to a more sustainable future. Currently, the proposals contain aspects which are overly prescriptive and would exclude many existing funds, which are being sold legitimately to satisfied customers on the basis of a strategy related to responsible or sustainable investment.
"Investment managers are committed to working with the FCA to find a pragmatic solution which will set the bar right for the sustainability labelling system and disclosures and most importantly, provide the best outcome for consumers.”
The IA's response highlights a number of key suggested changes that could make a positive difference to the effectiveness of the new SDR and investment labels framework, these include:
- Adopt a pragmatic approach to agency and influence and move away from specific language on channels for investor contribution.
- Introduce more inclusive and less prohibitive naming and marketing rules.
- Accommodate funds that invest in a blend of Improving and Focus assets within the Sustainable Focus label.
- Incorporate new sustainability-related fund information into existing product disclosures.
- Recognise current data and methodological limitations and allow firms to use internal frameworks as a credible standard for environmental and social sustainability.
- Adopt a more pragmatic approach to Impact.
- Recognition of importance of cross-border distribution.
For further information, please contact:
Helen Ayres, Head of Communications: [email protected]
T: +44 (0)20 7269 4620
Arianna Schardt, Communications Executive: [email protected]
T: +44 (0)20 7269 4625
IA Press Office: [email protected]
About the Investment Association (IA):
- The IA champions UK investment management, supporting British savers, investors and businesses. Our 270 members manage £9.4 trillion of assets and the investment management industry supports 114,000 jobs across the UK.
- Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
- Our purpose is to ensure investment managers are in the best possible position to:
- Build people’s resilience to financial adversity
- Help people achieve their financial aspirations
- Enable people to maintain a decent standard of living as they grow older
- Contribute to economic growth through the efficient allocation of capital.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
- The UK is the second largest investment management centre in the world, after the US and manages over a third (37%) of all assets managed in Europe.