Firms implementing the Sustainability Disclosure Requirements of the UK financial regulator will face challenges including product governance challenges and tight timelines for compliance with the ‘anti-greenwashing’ rule.
A report from PwC and the UK Sustainable Investment and Finance Association also identified fund labelling interoperability across different jurisdictions and uncertainty over the qualifying criteria for the labelling categories as key challenges.
Publication of the report follows the publication by the Financial Conduct Authority in November of its final rules on UK SDR and investment labels.
The report finds that the implications of the SDR package will be felt across the breadth of asset management organisations and other institutions, such as financial advisers and investment platforms.
David Croker, a partner at PwC UK, said: “The FCA’s SDR package represents a significant development in the UK’s sustainable finance regulatory framework, bringing with it wide-ranging impacts on the asset management sector.
“As asset managers continue to grapple with evolving sustainable finance regulation globally, it will be important for them to take a strategic view of the SDR package to help manage challenges around interoperability.”
FCA is keeping close eye on systemic risk following private equity fears
