IA publishes Guidance on FCA’s Guiding Principles on ESG and Sustainable Investment Funds

Written by Zhuan Faraj

On 20 September 2021, the Investment Association (“IA”) published guidance on the FCA’s Guiding Principles on ESG and Sustainable Investment Funds. The Guiding Principles were first set out in the Annex to a Dear Chair letter dated 19 July 2021 on improving the design, delivery and disclosure of ESG and sustainable investment funds.

The purpose of the IA’s guidance is to help members implement the Guiding Principles and ensure more consistent customer communications. The guidance includes:

• Key considerations and examples of application for each Guiding Principle
• A prospectus checklist to assist with ESG-specific prospectus disclosures
• Three case studies using fictitious funds to demonstrate the FCA’s likely considerations at the fund authorisations gateway

The guidance notes that although the FCA was provided with an earlier copy of the guidance to provide comments, the FCA has not endorsed it. The guidance has, however, been designed by the IA to set out ways in which members can address industry-wide issues on the basis of a common framework.

For further information the IA’s guidance can be found here.