The Financial Conduct Authority (FCA) is urged to rethink its Sustainability Disclosure Requirements (SDR).
- Miranda Beacham of Aegon Asset Management highlights SDR’s limitations at a recent conference.
- There is a call for ethical funds to be recognised within the SDR framework.
- Beacham acknowledges the FCA’s strides in enhancing sustainable investment transparency.
- Concerns are raised regarding ethical funds’ exclusion from existing SDR labels.
The financial sector is advocating for a comprehensive review of the Sustainability Disclosure Requirements (SDR) set by the Financial Conduct Authority (FCA). As the industry progresses towards more sustainable investment practices, there is a pressing necessity to ensure that these requirements are inclusive of ethical funds, an aspect currently overlooked.
Miranda Beacham, serving as the head of UK responsible investment at Aegon Asset Management, shared her insights during the recent SRI Services Good Money Week conference. She pointed out that while the implementation of SDR has been broadly successful, surpassing industry expectations, there remains a significant gap. Specifically, ethical funds are excluded from the SDR’s purview, and consequently, do not qualify for any of the four available labels under this regulation.
Beacham commended the FCA for its efforts towards enhancing transparency in sustainable investments, acknowledging its regulatory push has significantly impacted the landscape. However, she cautioned that the current framework falls short by not encompassing ethical funds, which are crucial to promoting broader sustainable investment goals.
The absence of ethical funds from the SDR label framework raises questions about the comprehensiveness of the regulation. It is essential for the regulatory body to reassess and consider the inclusion of these funds to align more closely with evolving industry standards and investor expectations.
In conclusion, addressing the limitations within the SDR framework by including ethical funds could foster a more inclusive and transparent investment environment.
Incorporating ethical funds into the SDR framework is vital for a complete sustainable investment strategy.
