Climate-related disclosures for asset managers by the FCA

What rules govern ESG investment? How do the regulations impact asset managers?

Climate change presents financial risks, and the Financial Conduct Authority (FCA) is aligned with the UK government’s efforts of using regulation to move towards a sustainable economy. For fund managers, climate change can negatively impact investment values, but there is also demand by investors for a greater range of ESG funds.

However, one must not ignore the ‘S’ and the ‘G’, as social and ethical expectations such as governance, diversity and inclusion play an important role in managing financial risks and have also become an area of interest for investors.

When it comes to the regulation of funds, the FCA aims to enhance transparency so that investors can identify whether a fund meets their needs. An important accountability mechanism is to set measurable targets, which lead to market integrity as more structured disclosures enable better informed investment decisions by investors.

The sector still lags behind other industries in respect of material and component parts being dismantlable and reusable.

The fund should be clear on the measurement of how non-financial objectives are met.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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