What is SDR?

Posted on July 3rd 2024

The Sustainability Disclosure Requirements (SDR) is a regulatory regime established by the Financial Conduct Authority (FCA) to standardise how sustainability information is disclosed by financial market participants in the UK.

Why Are SDR Regulations Important?

The primary aim of SDR is to provide investors with clear, transparent, and consistent information about the Environmental, Social, and Governance (ESG) factors that investment products and firms consider. This ensures that investors can make informed decisions based on reliable and comparable data.

Key Provisions of the SDR

Anti-Greenwashing Rule: Ensures that all claims regarding sustainability are truthful and not misleading.

Sustainability Product Labels: Helps investors easily identify the sustainability characteristics of investment products.

Naming and Marketing Rules: Regulates how investment products can be named and marketed to prevent misrepresentation.

Product-Level and Entity-Level Disclosures: Mandates detailed sustainability disclosures at both the product and firm levels.

Reporting Requirements: Sets out the specific reporting obligations for financial market participants.

What’s Next?

As the SDR is still being rolled out, some requirements are subject to change. Businesses need to stay informed about these developments to ensure compliance.

Want to know more about how SDR will affect your business? Contact us at [email protected].