CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels

ClientEarth's response to the FCA's CP22/20 proposes several enhancements to the SDR framework to ensure consumer protection and environmental integrity. Key recommendations include the adoption of a "do no significant harm" principle, the implementation of "double materiality" in reporting, and the tightening of criteria for "sustainable focus" and "sustainable improver" labels. The organization warns that the term "sustainable" may be misleading if products only target narrow objectives while causing harm elsewhere, and calls for a robust enforcement roadmap to oversee the self-certifying labelling regime.

• The proposed use of the term "sustainable" in investment labels may mislead consumers into believing a product is "wholly sustainable" and aligned with international climate goals, such as the 1.5°C target, even if it only targets a single narrow sustainability objective.
• ClientEarth proposes a "do no significant harm" principle for the sustainable focus and sustainable impact labels, suggesting the FCA align this with the EU Taxonomy's six environmental objectives and the UN Guiding Principles on Business and Human Rights.
• The organization argues for the adoption of "double materiality" in both entity and product sustainability reports, requiring disclosure of both the financial impact of environmental factors on the firm and the firm's actual impact on society and the environment.
• ClientEarth recommends increasing the asset threshold for the "sustainable focus" label from 70% to 100% to meet consumer expectations and avoid falling behind the European Securities and Markets Authority's proposed 80% threshold.
• The criteria for the "sustainable improver" label are criticized as too vague; ClientEarth proposes that it should only apply if the firm commits to stewardship and it is credible that improvement will occur in response to the firm's actions.
• The proposed anti-greenwashing rule should be strengthened to explicitly require firms to avoid omitting important information and to substantiate sustainability claims with science-based evidence.
• Because the SDR labelling regime is self-certifying, ClientEarth emphasizes the need for a clear FCA enforcement roadmap detailing how labels will be tested and the consequences for failure, such as fines or loss of labels.

APA

ClientEarth (2023). CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels. https://www.clientearth.org/media/vcrdg43h/clientearth-response-to-fca-cp22-20-sdr-and-investment-labels.pdf

Chicago

ClientEarth. CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels. 2023. https://www.clientearth.org/media/vcrdg43h/clientearth-response-to-fca-cp22-20-sdr-and-investment-labels.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels |date=January 2023 |url=https://www.clientearth.org/media/vcrdg43h/clientearth-response-to-fca-cp22-20-sdr-and-investment-labels.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2023cp2220, author = {{ClientEarth}}, title = {{CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels}}, publisher = {ClientEarth}, year = {2023}, month = jan, url = {https://www.clientearth.org/media/vcrdg43h/clientearth-response-to-fca-cp22-20-sdr-and-investment-labels.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }