Identifying sustainable investments
The UK financial services regulator, the Financial Conduct Authority, has introduced a set of labels and clear and simple information requirements for funds which seek to invest with specific sustainability goals. The sustainability labels can be used by investors to target their investment pathway in a direction that meets both their financial and sustainability objectives.
CLICK HERE to visit the Financial Conduct Authority's dedicated webpage which explains the new sustainability fund labels. The sustainability fund labels provide you with better information on investments and help you find funds that meet your sustainability objectives
The four sustainability labels:
Improvers
Descriptor: ‘invests mainly in assets that may not be sustainable now, with an aim to improve their sustainability for people or the planet over time’
Focus
Descriptor: ‘invests mainly in assets that focus on sustainability for people or the planet’
Impact
Descriptor: ‘invests mainly in solutions to sustainability problems, with an aim to achieve a positive impact for people or the planet’
Mixed Goals
Descriptor: ‘invests mainly in a mix of assets that either focus on sustainability, aim to improve their sustainability over time, or aim to achieve a positive impact for people or the planet’
Identifying sustainable investment funds that don’t have labels
Alongside the sustainability labels, there are also funds without labels that have sustainability characteristics. Where this is the case, the fund may have chosen not to feature a label or the fund does not meet the detailed criteria for a label (this could be, for example, for flexibility in the investment strategy or inclusion of ethical screens). The new regulatory measures mean that you’ll still have access to clear and simple information about what the fund is investing in. You’ll also be able to see a statement explaining why it doesn’t have a label.