For firms seeking a sustainability label, the process goes beyond fund naming and marketing materials. Managers must be able to demonstrate how sustainability considerations are incorporated into investment decisions and show that funds meet the FCA’s criteria for the relevant label.
This has brought greater focus to the evidence supporting sustainable investment claims at a time when investors are increasingly seeking clarity on how sustainability is delivered in practice.
EdenTree is one of the firms to have completed the process across its entire fund range, with every strategy now carrying either a Sustainability Impact or Sustainability Focus label.
The SDR regime was introduced by the FCA to help improve transparency within the sustainable investment market and make it easier for investors to understand the characteristics of different products. The framework is also intended to help address concerns around greenwashing by establishing clearer standards around the use of sustainability-related terms.
Under the framework, funds carrying a Sustainability Impact label invest in companies whose products, services or activities are intended to contribute to positive outcomes for people or the environment. Such funds are required to demonstrate a clear impact objective, intentionality and evidence of contribution towards real-world outcomes.
Sustainability Focus funds follow a different approach. These strategies invest in assets that meet high environmental or social sustainability standards through their operations, behaviours and long-term practices. To qualify, funds must apply robust sustainability criteria and undertake ongoing assessment of holdings.
At the centre of EdenTree’s approach is the EdenTree Standard, the firm’s sustainability assessment framework. The framework is used across the range to assess how companies create value for people, planet and investors.
For asset managers more broadly, SDR has introduced a more structured approach to sustainability classification. Rather than relying solely on broad sustainability claims, firms seeking labels must be able to demonstrate how sustainability objectives are reflected throughout the investment process and portfolio construction.
For investors, the labels provide an additional tool for understanding how individual funds approach sustainability and how those approaches differ across the market.
Securing SDR labels across an entire fund range therefore reflects not only a commitment to sustainable investing, but also the work required to align investment processes, fund objectives and reporting with the FCA’s requirements.
To learn more about EdenTree’s fully SDR labelled range, head here: EdenTree achieves a fully SDR-labelled fund range | EdenTree
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