FCA’s ESG Marketing & Naming Rules Delayed - What you need to know

If your business is involved in sustainable investing, you’ve probably been keeping an eye on the Financial Conduct Authority’s (FCA) new ESG rules. These regulations are designed to bring more transparency to sustainable investment products and clamp down on misleading claims (aka greenwashing).

Originally set to take effect in December 2024, the FCA has now pushed back enforcement to

2 April 2025, giving firms a little extra time to get their naming, marketing, and sustainability disclosures in order. But don’t get too comfortable!

What Are These ESG Marketing & Naming Rules?

The new rules are all about making sure investment products live up to their sustainability claims. If a fund or financial product is marketed as ‘sustainable,’ ‘green,’ or ‘impact-focused,’ it needs to meet strict criteria.

Here’s what the FCA expects:

No Misleading Names - Funds using terms like ‘sustainable’ or ‘impact’ must prove they align with specific ESG standards. No more vague labels.

Clearer Marketing Materials - Promotional content needs to accurately describe the sustainability features of the product. Investors should know exactly what they’re getting.

Alignment with Disclosure Rules - The way a product is named and marketed must match the sustainability disclosures required under the FCA’s Sustainability Disclosure Requirements (SDR).

Why the Delay?

The FCA recognises that firms need more time to adjust their product names, marketing materials, and disclosures to meet the new standards. So, they’ve introduced temporary flexibility for businesses that meet certain conditions.

Here’s how it works:

• If a firm currently uses sustainability-related terms in a fund name (e.g. ‘sustainable,’ ‘sustainability,’ ‘impact’) and plans to either adopt an official sustainability label or rename the fund, they must have applied for approval by 1 October 2024

  
  

• If the application was in by that deadline, the firm gets an extension until 2 April,2025, to fully comply with the new rules.

What Should Firms Do Now?

Even with the delay, waiting until the last minute isn’t a good idea. The FCA has made it clear that where firms can comply with the rules without requiring this flexibility, they should do so. Here’s how businesses can get ahead:

• Review Product Names & Marketing - Are your sustainability claims solid, or do they need adjusting? Now’s the time to clean up any vague or misleading terms.

• Check Your Disclosures - Ensure your naming and marketing align with FCA disclosure rules. Any inconsistencies could land you in hot water.

• Stay Compliant with Other ESG Rules - The anti-greenwashing rule still applies, so businesses must continue being transparent about their ESG commitments.

My Final Thoughts

The FCA’s ESG rules are all about making sustainability claims more honest and transparent. The deadline may have been pushed back, but businesses should use this extra time wisely.

By getting your product names, marketing, and disclosures in line now, you’ll not only avoid last-minute compliance stress - you’ll also build trust with investors and customers who genuinely care about ESG.