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The UK Sustainability Disclosure Requirements (UK SDR) introduce sustainable investment labels at both the entity and product level to provide transparency and confidence in sustainable investment products to better finance a sustainable transition.
It aims to guide both retail and institutional investors in their investment decisions and avoid greenwashing.
At the entity level, portfolio management firms, alternative investment fund managers, investment companies and management companies of undertakings for collective investment in transferable securities; at the product level, authorised funds, unauthorised alternative investment funds and portfolio management services are covered by the UK SDR.
Implementation is phased in:
- Anti-greenwashing rules and guidance on 31 May 2024,
- Sustainable investment labels with accompanying disclosures on 31 July 2024,
- Naming and marketing rules with accompanying disclosures on 2 December 2024,
- Product and entity-level disclosures for firms with more than £50 billion of assets under management on 2 December 2025,
- Entity-level disclosures for firms with more than £5 billion of assets under management on 2 December 2026.
The UK SDR does not apply or affect directly to non-UK companies. One of its purposes is to incentivise UK companies to improve their ESG performance in order to attract sustainable investment. As a result of the financial opportunities, UK companies may change their business strategy to make more sustainable choices within their supply chains.
