Find out what rules firms need to follow for sustainable investment products, including naming and marketing, disclosures, and voluntary labelling.
The Sustainability Disclosure Requirements (SDR) regime aims to help consumers navigate the market for sustainable investment products, improve trust and reduce greenwashing.
This page is for asset managers and distributors in scope of the SDR.
Below, we outline the key requirements that may be helpful for your firm.
Updates on Sustainability Disclosure Requirements
We have published more examples of good and poor practice for SDR labels.
Please see Handbook Notice 136[3] for minor amendments to the SDR rules from December 2025. We consulted on these changes in CP25/24[4].
Key elements of the SDR regime
All FCA-authorised firms must follow our anti-greenwashing rule if you make sustainability-related claims about financial products and services.
See FG24/3[5], our non-handbook guidance on the anti-greenwashing rule.
Asset managers must follow our mandatory rules on:
Asset managers can also use investment labels. These are voluntary.
If you distribute investment products to retail investors in the UK, there are targeted rules you must follow.
Find out what we expect from distributors.
For more information, refer to our:
- Environmental, Social and Governance (ESG) Sourcebook[6] for the rules.
- Policy Statement, Sustainability Disclosure Requirements (SDR) and investment labels[7] (PS23/16), including Annex 2 which sets out an overview of the SDR regime.
Naming and marketing
Asset managers must meet the naming and marketing requirements for retail investment products that use sustainability-related terms in their product names and marketing.
See ESG 4.3.2R to ESG 4.3.10R of the ESG Sourcebook[6].
Products using sustainability-related terms in their names must have sustainability characteristics. Their names must accurately reflect those characteristics.
The terms ‘sustainable’, ‘sustainability’, ‘impact’ (and any variation of those terms) must not be used in product names unless the product uses a label.
Disclosures
Below, we outline the disclosures firms must make under the SDR regime.
This applies to both labelled and unlabelled products.
The anti-greenwashing rule and its non-handbook guidance may be helpful for firms. For example, when preparing disclosures firms should ensure they are:
- Clear.
- Presented in a way that can be understood by the intended audience.
Pre-contractual disclosures
Firms must prepare pre-contractual disclosures for labelled products and unlabelled products using sustainability-related terms (as set out in ESG 4.3.2R(2)) in their names and marketing.
These disclosures should include the following.
All in-scope products
Criteria used to decide the product’s sustainability characteristics.
Any metrics that a retail client may reasonably find useful to understand the product’s investment policy and strategy (see ESG 5.3.2R (2)).
Unlabelled products
Statement that the product does not have a label, and the reasons why.
Labelled products
Extra information, such as about the product’s sustainability objective (see ESG 5.3.2R(1)).
We previously published examples of illustrative pre-contractual disclosures (PDF)[9] for each label type.
We presented these as worked examples for hypothetical products.
In February 2026, we published further examples of good and poor practice, with some key messages for firms preparing disclosures.
Consumer-facing disclosures
Firms must prepare consumer-facing disclosures for labelled products and unlabelled products using sustainability-related terms (see above) in their names and marketing.
Read our non-handbook guidance on the anti-greenwashing rule[5] for help to make sure:
- Your disclosure is clear for retail investors and avoids jargon.
- You consider the overall impression a disclosure makes – including its visuals.
Where the Consumer Duty applies, firms need to ensure your communications:
- Meet the information needs of retail customers.
- Are likely to be understood.
- Equip retail customers to make decisions that are effective, timely and properly informed.
Firms must comply with our rules on publication and accessibility. You should also take into account our guidance (see relevant sections of ESG 5.2.4R to 5.2.10G).
Sustainability reports
Firms must produce sustainability reports at product and entity-level under SDR, as applicable.
Firms in scope of the labelling and naming and marketing rules must produce detailed product-level reporting.
Entity-level reporting has a wider scope.
Find out more about asset managers’ reporting requirements and how the SDR interacts with Task Force on Climate-Related Financial Disclosures (TCFD) reporting on our sustainability reporting webpage[10].
Investment labels
There are 4 investment labels that can only be used for in-scope funds (UK UCITS and UK AIFs) with sustainability objectives that aim to achieve positive outcomes for the environment and/or society.
To use a label, these funds must meet general and specific criteria. They accommodate funds investing in different types of assets such as real estate, equity, bonds, projects etc, and those with different investment strategies, including index tracking.
For more on general criteria, see our page on how to use sustainability labels[11].
Sustainability Focus
Focus funds invest in assets that are environmentally and/or socially sustainable.
Assets meet a robust, evidence-based standard of sustainability.
Examples include investing in assets that have transitioned to renewable energy sources or those that provide healthcare or education services.
Sustainability Improvers
Improvers funds invest in assets that have the potential to improve environmental and/or social sustainability over time.
Assets have the potential to meet a robust, evidence-based standard of sustainability.
Examples include investing in assets with credible plans to reduce their emissions or that have made commitments to improve social standards over time – such as human rights or labour practices.
Sustainability Impact
Impact funds aim to achieve a pre-defined positive, measurable impact in relation to an environmental and/or social outcome.
Examples include investing in assets facilitating the transition through the deployment of new climate technology solutions, new renewable energy generation or social housing development.
Sustainability Mixed Goals
Mixed Goals funds invest in line with a combination of 2 or more of the sustainability objectives for the other labels.
Example investments may be a mixture from the labels above.
How to use sustainability labels
Firms intending to use a sustainability label as part of the SDR regime must notify the FCA.
Distributors
This section is for distributors subject to ESG 4.1.16R – 4.1.19R (including advisers and platforms).
For labelled products, distributors must communicate the label and consumer-facing disclosure to retail investors.
For unlabelled products, distributors must communicate the consumer-facing disclosure.
Distributors are subject to the anti-greenwashing rule[13]. You must make sure references to the sustainability characteristics of a product or service comply with that rule.
Read our Policy Statement (PS23/16 PDF[14]) to learn more about the role and requirements of distributors.
Distributors should also see our information on downloading investment labels[15].
Overseas products
Distributors must display or otherwise communicate a notice on overseas-domiciled funds that use sustainability terms, making it clear that the fund is not subject to the UK SDR regime.
