The Financial Conduct Authority (FCA) has highlighted several examples of poor disclosure practice by fund managers offering ESG and sustainable funds to UK consumers in a new review. The regulator said ESG and sustainability information was often “not explained or put into context” in disclosures, with some relevant information not included. It also found that firm-level disclosures were sometimes not easily reconcilable with fund-level disclosures; in other instances, key ESG and sustainability information was not clearly presented or made accessible. Some funds with ESG or sustainability in their names did not have explicit ESG or sustainability objectives, although typically relevant outcomes were reflected in investment policies or strategies. The FCA reviewed the fund disclosures and approaches of 12 fund managers which offered active or passive retail funds with ESG or sustainability-related names, evaluating them against requirements and guidance in the FCA Handbook and expectations from its July 2021 Guiding Principles letter. The UK watchdog said its guiding principles on delivery and design were better embedded in the funds reviewed, but it still found that stewardship approaches “generally did not meet our expectations”, noting also that fund holdings at some funds were inconsistent with stated green objectives. The review comes ahead of final rules and guidance from the FCA on its Sustainability Disclosure Requirements (SDR) and investment labels regime. Evidence of good practice included the development and use of “appropriate” ESG and sustainability scoring systems and benchmarks, and the conduct of thorough due diligence on third party data providers.