A new guidebook helps asset managers navigate Sustainability Disclosure Requirements, regulations
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UK Sustainable Investment and Finance Association (UKSIF) and consulting firm, PwC collaborated to produce a guidebook for the Sustainability Disclosure Requirements regulations. Its aim is to help asset managers and other financial firms comply with new anti-greenwashing rules.
Read more: Corporate climate watchdog tightens rules for asset managers and banks
The report says, “UKSIF and PwC collaborated alongside our members, including representatives from our SDR Implementation Working Group, to offer asset management firms initial insights and recommendations for action as they implement various elements of the SDR regulation over this year.”
Challenges identified include:
- fund labelling interoperability across different jurisdictions
- uncertainty over the qualifying criteria and standards for the labelling categories
- product governance challenges
- tight timelines for compliance with the ‘anti-greenwashing’ rule
The guidebook identifies ten key areas for asset managers to focus on:
- Carefully consider what label to apply to products under the SDR, considering any commercial benefits and client and stakeholder expectations and perceptions around labelled and unlabelled products.
- Focus on demonstrating compliance with the 70% threshold for sustainable-labelled funds.
- Establish a firm-wide product classification framework to manage the complexity within the SDR package and the international fragmentation of regulatory approaches.
- Step up engagement with distributors at the earliest opportunity to ensure those distributors are comfortable with the core sustainability features of each product, the application of any labels, and any restrictions around non-labelled funds being offered.
- Perform a broad, firm-wide greenwashing review to support compliance with the ‘anti-greenwashing’ rule.
- Develop a taxonomy of terms applied internally to identify potential greenwashing and prevent it in the future.
- Focus sustainability reporting on what is most relevant and material to your business and clients.
- Streamline data collection and leverage existing reporting processes to avoid duplication and drive efficiencies.
- Align reporting cycles with TCFD reporting where possible.
- Adopt a strategic, long-term approach to reporting that creates value for your organisation.
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