Sustainability Disclosure Requirements and investment labels

ClientEarth supports the FCA's proposed SDR and labelling framework in principle but warns that without strict criteria and enforcement, the regime could formalise greenwashing. The organization advocates for the adoption of 'double materiality' in disclosures, the removal of the 'Responsible' label, and the refinement of the 'Sustainable-Transition' label to avoid confusion with climate-specific terminology. It further calls for mandatory sustainability impact metrics and a clear enforcement roadmap to ensure accountability for fund managers.

• ClientEarth warns that the proposed investment labels could inadvertently "formalise" greenwashing if they are awarded to funds with weak sustainability features that would surprise consumers.
• The organization argues that the "Responsible" label should be removed because integrating material sustainability risks is a basic legal and fiduciary duty for all fund managers and does not justify a specific sustainability label.
• ClientEarth expresses concern that the "Sustainable-Transition" label may be misinterpreted as referring specifically to climate-related or UK Taxonomy-aligned criteria, even when awarded for other social or environmental claims.
• The document emphasizes that SDR disclosures must incorporate "double materiality," capturing both the financial risks to the investment and the actual impact of the investment on society and the environment.
• ClientEarth recommends that the "Sustainable-Impact" label be strictly reserved for funds that can demonstrate "investor impact," defined as the change in company impact specifically achieved by the investor's activity.
• The response highlights a critical absence of monitoring and enforcement details in DP21/4, calling for a clear roadmap that includes the consequences of failing to meet labelling criteria, such as fines or loss of labels.

APA

ClientEarth (2022). Sustainability Disclosure Requirements and investment labels. https://www.clientearth.org/media/pbopi1ps/clientearth-response-to-fca-dp21-4.pdf

Chicago

ClientEarth. Sustainability Disclosure Requirements and investment labels. 2022. https://www.clientearth.org/media/pbopi1ps/clientearth-response-to-fca-dp21-4.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Sustainability Disclosure Requirements and investment labels |date=January 2022 |url=https://www.clientearth.org/media/pbopi1ps/clientearth-response-to-fca-dp21-4.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2022sustainability, author = {{ClientEarth}}, title = {{Sustainability Disclosure Requirements and investment labels}}, publisher = {ClientEarth}, year = {2022}, month = jan, url = {https://www.clientearth.org/media/pbopi1ps/clientearth-response-to-fca-dp21-4.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }