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SUSTAINABLE FINANCE

Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.

In 2019, the UK became the first major economy to commit in law to net zero greenhouse gas emissions by 2050. In 2021, the government went further, setting in law the world’s most ambitious climate change target to cut emissions by 78% by 2035 compared to 1990 levels. To achieve this, the whole economy will have to transform.

This shift is well underway. The market for ESG investments in the UK has grown dramatically. Businesses and financial institutions are responding to the challenge and impetus to grow in responsible, sustainable ways.

Sustainable finance will be crucial in directing private investments into the transition towards net zero and into companies that demonstrate good governance. It will play a role in fighting the climate change, in making our societies more diverse and inclusive and in supporting a more sustainable economy.

January 2025

Corrections and Clarificatory Amendments to the Sustainability Disclosure Requirements (SDR)

On 6 December 2024, the FCA published Quarterly Consultation Paper No 46 (CP24/26), proposing to make amendments to the Environmental, Social and Governance sourcebook. It also proposes to update certain guidance provisions in other related sourcebooks for the purposes of clarifying certain existing rules and giving proper effect to the policy proposals consulted upon in Consultation Paper 22/20 and finalised in Policy Statement 23/16.

We consider the SDR amendments to be mostly sensible given that they simply clarify the existing policy intentions. Our response focuses on sections relevant to our members in their role as distributors.

Read the full response here.

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