Rathbones and UKSIF have published a new guide which aims to demystify sustainability fund labels and encourage investors to ensure they have the investments they want.
The guide, published in partnership with UK Sustainable and Investment Finance Association (UKSIF), aims to demystify the Financial Conduct Authority’s (FCA) 2023 SDR framework, which changed the rules around how investment funds can be described and marketed. They aim to address investor concerns over greenwashing and restore trust and improve transparency in the sustainable investment space.
And Greenbank, the ethical and sustainable specialists within Rathbones Group, is urging consumers to challenge their financial advisors to ensure their money is invested as they expect.
The guide, ‘A Consumer Guide to Sustainable Investment Funds’, was launched as part of UKSIF’s annual Good Money Week, and breaks down what the SDR rules mean in practice, from marketing and disclosure standards to the differences between the four SDR labels that now appear on UK funds.
Investors are encouraged to ask questions around where their money is invested. “If something doesn’t add up, like a fund holding a company that seems to contradict its sustainability label, then ask for more information,” the guide says.
It also reassures consumers that they “do not need to be an expert to start thinking about sustainable investment” and advises investors to dig deeper into a fund’s sustainability objective to understand if it reflects their own priorities.
“Sustainable investing shouldn’t feel intimidating,” said David Harrison, Head of Sustainability, Rathbones Asset Management, and Lead Fund Manager of the Rathbone Greenbank Global Sustainability Fund. “The new SDR labels are there to make sustainability clearer, but they’re not the whole story. We want investors to know it’s okay, in fact, essential, to ask questions about what a fund is really doing with their money.
“Working with UKSIF, we want to make sure every investor feels confident to challenge claims, explore the detail and choose investments that reflect their values.”
The guide highlights that while SDR labels bring welcome clarity, the absence of a label does not mean a fund is not sustainable; rather, it underscores the importance of understanding each product’s sustainability objective and how it is measured.
It also offers practical tips on interpreting sustainability objectives, assessing fund holdings, and reviewing engagement reporting, helping investors see how their capital is driving change in the real world.
In November, Rathbones is hosting its Responsible Investment Summit, curated by Greenbank and bringing together clients, partners and industry experts to explore the future of responsible investing across private client, charity and advisor communities.
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