Proposed rules to tackle 'greenwashing' are credit positive for asset managers

Written by Adam Cadle

27/10/2022

Proposed rules by the FCA to tackle ‘greenwashing’ are credit positive for asset managers, Moody’s Investors Service has said, as “it will create a more robust labelling and disclosure framework for UK asset managers and boost consumer confidence in sustainable investing, supporting the industry’s growth and revenue expansion”.

Based on sustainability-related investment objectives and product features, fund managers will be able to label their investment products ‘sustainable focus’, ‘sustainable improvers’ or ‘sustainable impact’.

The FCA is also looking to introduce restrictions on how terms such as ‘ESG’, ‘green’ and sustainable’ are used.

“Investor demand will drive new inflows and fee revenue for the asset management industry,” Moody’s Investors Service stated.

The FCA aims to finalise the rules and publish a policy statement by the end of the first half of 2023. It also intends to further consult on expanding the regime's scope to regulated asset owners.

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