Updates on the UK fund-market anti-greenwashing rules

Written by Neil Sullivan

Director

Updated by Sarah Walker

Marketing Coordinator

Last Reviewed 23/10/2026

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 sustainability claims are communicated across the financial services sector.

At the centre of this shift is the Financial Conduct Authority’s (FCA) anti-greenwashing rule, introduced alongside its wider Sustainability Disclosure Requirements (SDR) regime. The anti-greenwashing rule applies to all FCS-authorised firms when claiming any sustainability-related claims regarding their product/service. 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 evidence and presented in a way that investors can understand.

SDR: a broader framework for transparency and trust

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

  • Naming and marketing restrictions for in-scope investment products using sustainability-related terms
  • Structured disclosures at both product and entity level
  • Optional investment labels for products that meet defined FCA criteria
  • Requirements for distributors 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.

Naming and marketing now under scrutiny

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

Under the SDR Naming and Marketing rules;

  • In-scope investment products must meet specific requirements when sustainability terms are used.
    • Such as “sustainable”, “sustainability” or “impact”
    • This generally signals a use of an FCA sustainability label
  • Unlabelled products may use other sustainability-related terms in there name subject to applicable conditions and disclosure requirements

Additionally, in February 2026 the FCA published additional examples of  good and poor practice to help firms apply its SDR investment labels and prepare appropriate disclosures.

Disclosure expectations are increasing

This change in the anti-greenwashing rules has driven real and widespread renaming of products 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 disclosures explaining sustainability characteristics in accessible language for retail investors
  • Pre-contractual disclosures for relevant sustainability objectives, investment criteria and metrics
  • Ongoing product-level reporting to provide further information about sustainability characteristics and performance.
  •  Entity-level disclosures for asset managers that fall within the relevant requirements
These disclosures must align with the anti-greenwashing rule — meaning they must not only be clear, but also presented in a way that is meaningful and accessible. This effect is changing how sustainability information is communicated, moving from marketing-led narratives to evidence-based disclosure.
A further regulatory development came in September 2026, when the FCA updated its climate-reporting requirements for certain financial firms. These firms must assess whether climate change could affect a product’s financial performance and share relevant information with clients. Demonstrating that there is continued and ever-changing sustainability requirements within the sector.

Why this matters for the market

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

The FCA’s anti-greenwashing rule has been in place since 31st May 2024. Firms making unclear or exaggerated sustainability claims can expect regulatory scrutiny. Firms need to ensure that claims are supported by appropriate evidence.

2. “Sustainability” is no longer a branding shortcut

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

3. Investor trust is becoming the central objective

A central aim of the 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.

What firms should be doing now

Although the framework is already in force, many firms should continue reviewing their approach as the SDR framework develops.

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
  • Checking within product-level and entity-level reporting requirements apply to the firm and ensuring that relevant deadlines are met
The direction of travel is clear: sustainability claims must be treated with the same rigour as financial performance data.

A lasting shift, not a temporary compliance exercise

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

With the core SDR framework already in force and disclosure expectations expanding, the UK fund market faces growing expectations around how sustainability claims are communicated.
For firms in this space, three principles remain:
  • Sustainability positioning must be defensible
  • Disclosures must be consistent across channels
  • ESG must be integrated into core governance and reporting, not just marketing
The question is no longer whether the anti-greenwashing rules apply — but how effectively they are embedded.

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