FCA Fund Labels Require “Radical Transparency” from Managers

UK-based WHEB Asset Management has urged the fund management industry to improve the level of transparency in disclosures beyond standard financial metrics. This comes ahead of the UK Financial Conduct Authority’s (FCA) new fund-labelling rules, expected in the next few months, which will require fund managers with products falling under ESG or sustainability-related labels to transparently outline the real world social and environmental impacts of their investments to justify their chosen categorisations. WHEB has published its 2022 impact report, which it hopes will serve as a template for industry-wide reporting on non-financial impact performance. George Latham, Managing Partner at WHEB, said: “Over the past ten years or so, we have seen many imitation strategies launched from established fund managers as demand for sustainable solution-based funds increases. […] Current fund-labelling and reporting requirements are open to manipulation, with companies divulging the metrics they want you to hear. Our Impact Report draws a line in the sand. We believe it offers a no-holds-barred assessment of what we’re achieving in terms of our impact on sustainability and the environment. I urge other change-makers in the fund industry to adopt this level of radical transparency ahead of regulatory demands for it.” WHEB’s Sustainable Impact Fund and Environmental Impact Fund are categorised as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).  

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