A foundational rule that applies to all firms

The UK’s approach to anti-greenwashing rules in financial services is no longer a future concern — it is already embedded in regulation and actively shaping how funds are marketed, described and sold.

At the centre of this shift is the Financial Conduct Authority’s (FCA) Sustainability Disclosure Requirements (SDR) regime, supported by a broad anti-greenwashing rule that applies across the entire regulated market. Together, these measures are redefining expectations for ESG claims, investor communications and sustainability positioning.

Having worked with a number of regulated firms to develop their ESG reporting, our take is that the FCA’s anti-greenwashing rules are intentionally simple, but have far-reaching implications:

Any sustainability-related claim must be clear, fair and not misleading
Claims must be consistent with the actual sustainability characteristics of the product or service
The rule applies to all FCA-authorised firms, not just asset managers

This is not a niche ESG requirement — it is a core conduct rule. Whether a firm is managing funds, advising clients or issuing financial promotions, the same expectations apply. In practice, this means that any reference to “ESG”, “sustainable”, “green”, or similar terms must be backed by robust evidence and presented in a way that investors can understand.

The anti-greenwashing rule sits within the wider SDR framework, which introduces:

Naming and marketing restrictions for funds using sustainability-related terms
Structured disclosures at both product and entity level
Optional investment labels for funds that meet defined sustainability criteria
Requirements designed to help investors compare products and understand sustainability claims

The aim is clear – these rules provide a framework to increase trust in sustainable investment products and provide investors reliable, consistent information.

One of the most visible changes has been the tightening of anti-greenwashing rules linked to how how funds are described. Under SDR:

Funds cannot use terms like “sustainable”, “sustainability” or “impact” in their name unless they meet the very specific, and recognised standards
Marketing materials must accurately reflect the product’s underlying characteristics
Firms must avoid overstating positive impacts or selectively presenting information

In recent months, we’ve seen this change in the anti-greenwashing rules drive real and widespread renaming of funds and revisions to marketing materials across the UK asset management sector. For many firms, the adjustment has not just been regulatory, they’re viewing it as a strategic differentiation.

Beyond naming and marketing, SDR introduces a layered disclosure regime designed to improve transparency:

Consumer-facing summaries for retail investors
Pre-contractual disclosures for detailed product information
Ongoing product and entity-level reporting over time

These disclosures must align with the anti-greenwashing rule — meaning they must not only be complete, but also presented in a way that is meaningful and accessible. The net effect is a step change in how sustainability information is communicated, moving from marketing-led narratives to evidence-based disclosure.

1. anti-greenwashing rules are now a regulatory risk area

The FCA has explicitly positioned greenwashing as a conduct issue. Firms making unclear or exaggerated sustainability claims can expect regulatory scrutiny.

2. “Sustainability” is no longer a branding shortcut

Using ESG terminology now carries obligations. Firms must demonstrate substance, not just intent, behind sustainability claims.

3. Investor trust is becoming the central objective

The entire SDR regime is designed to address a long-standing issue: lack of confidence in ESG-labelled products. The FCA has been clear that inconsistent use of sustainability terms has led to confusion and reduced trust in the market.

Although the framework is already in force, many firms are still evolving their approach. Key areas of focus include:

Reviewing all marketing materials and fund documentation for compliance with anti-greenwashing expectations
Ensuring sustainability claims are evidence-based, balanced and clearly explained
Aligning internal data, reporting and governance processes with external disclosures
Assessing whether to adopt SDR labels or reposition products accordingly

The direction of travel is clear: sustainability claims must be treated with the same rigour as financial performance data.

The UK’s anti-greenwashing rules are not a standalone initiative — it is the foundation of a wider regulatory shift towards credibility, comparability and accountability in sustainable finance.

With SDR continuing to roll out and disclosure expectations expanding, the UK fund market is moving into a phase where:

Sustainability positioning must be defensible
Disclosures must be consistent across channels
ESG must be integrated into core governance and reporting, not just marketing

For firms operating in this space, the question is no longer whether the anti-greenwashing rules apply — but how effectively they are embedded.