SDR and Anti-Geenwashing

Apr 15, 2024 | Member Blog

A smiling woman with short blonde hair, wearing black and white polka dot blouse and black earrings, poses against a gray background.

Jess Williams – Head of Corporate Investment Services, Phoenix Group

Anti-greenwashing and SDR regulations – the key points for DC investors

Regulations arrive en masse this year, striving to make it easier for customers to understand the sustainability features of investment products. With detail to disseminate, and confusion mounting in the meantime, Jess Williams, Head of Phoenix Corporate Investment Services (CIS) discusses the key points for DC investors.

Consumers increasingly care about the sustainability credentials of their investments. According to the FCA, over 80% want their investments to do some good, as well as providing a financial return1.. But how many members truly understand – and trust – their pension investment’s sustainability credentials?

Two new sets of regulations, sitting alongside each other, are intended to help. At their core, these rules aim to build consumer understanding and trust, making it easier for them to choose investments aligned to their financial goals and values.

GC23/3: Anti-greenwashing rule

With growing demand for sustainable products, the FCA is concerned that providers have scope to exaggerate or mislead about the sustainability credentials of their products.

In response, the FCA announced its new anti-greenwashing rule taking effect from 31 May this year. It states that all sustainability-related claims made by FCA-authorised firms about their products and services must be fair, clear and not misleading.

The big news? Since its initial consultation period, the FCA has announced that the rule will apply to all FCA-regulated firms from day one, so life and pension products will also be in scope.

PS23/16: Sustainability Disclosure Requirements (SDR) and investment labels

The SDR policy statement is a mightier influence, with less room for interpretation. It covers several measures aiming to minimise greenwashing and improve the transparency of, and trust in, sustainable investment products.

Centre stage sit four investment labels that are intended to be consumer-friendly, which asset managers can use from 31 July this year.

Four icons representing sustainability themes: focus on community needs, improvements, solutions, and mix of assets, each described by brief text, under the logo of phoenix corporate investment services.

Use of these labels is voluntary, but use of sustainable language from a naming and marketing perspective will not be permitted from 2 December 2024 unless the specific labelling criteria are met.

Early analysis indicates that Sustainability Improvers and Sustainability Focus, will be the most widely used labels.

What can schemes do in the meantime?

The new regulations should go a long way towards improving the consistency of naming and marketing of sustainable investments across the industry. Time will tell whether the overarching aim to improve consumer understanding will be met. But they’ll take time to embed, especially the roll out to pension funds.

Some providers are going further than the regulations, with the aim of breaking through the terminology and inconsistency to help members better understand the sustainability of their investments.

At CIS, for instance, we’ve enhanced reporting for pension scheme trustees. We use everyday examples, such as carbon footprint explained in equivalent car emissions and home heating, to make the ESG credentials of their funds real and relevant.

Bringing to life the financial risks and opportunities of sustainability, alongside the potential to support people and the planet, is a powerful enabler to improving engagement and ultimately outcomes.


1 Matter of fact-sheets: Improving customer comprehension of financial sustainability disclosures, October 2022,

The asset managers that make up the DCIF are committed to promoting investment best practice within DC pension schemes.