On Thursday 16 November, the FCA published the results of its review into the extent to which authorised fund managers are compliant with UK regulatory expectations on the design, delivery and disclosure of ESG and sustainable investment funds (the “Review”).
The Review was conceived as a follow-up to the FCA’s Dear Chair letter for asset managers, published in July 2021. This Dear Chair letter detailed certain “Guiding Principles” intended to assist managers in constructing and delivering on the ESG and sustainability objectives of a fund, while providing disclosures that align with ESG claims.
At a high level, the FCA found that those managers surveyed demonstrated “good intent” to embed the Guiding Principles, and had considered the design, delivery and disclosure of ESG-focused funds through the lens of the Principles. In some cases, however, this positive intent had not filtered through into the manager’s investment and disclosure practices.