The FCA is publishing a Discussion Paper to coincide with COP26 Finance Day, inviting views on potential criteria to classify and label investment products.

In its most recent Financial Lives survey, the FCA found 80 per cent of respondents wanted their money to ‘do some good’, while also providing a financial return, 71 per cent wanted to ‘invest in a way that is protecting the environment’ and 71 per cent would not put their money into ‘investments which are unethical’.

Consumers are expected to need clear information and clear standards and be able to trust firms to deliver on their promises as the financial sector responds to growing demand.

Nikhil Rathi, chief executive of the FCA commented: “It is vital that we innovate to support industry’s shift to a more sustainable future. That is why the FCA has been leading from the front. Developing consistent, trusted standards are a vital part of that, giving investors the confidence to put their money where it can deliver the most sustainable outcome.”

The Discussion Paper forms part of the FCA’s new ESG Strategy released today. The strategy sets out the FCA’s critical role in supporting the transition to a more sustainable economy, working with industry, listed companies and international partners. Building trust and integrity in the market for ESG products, and ensuring transparency, are central to the strategy.

Speaking at COP26, Nikhil Rathi will also announce that the FCA will confirm final rules, which align to TCFD standards, on disclosures for a wider scope of listed issuers, as well as asset managers, life insurers and FCA-regulated pension providers, by the end of 2021.

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