FCA Anti-Greenwashing and SDR: How to Evidence Sustainability Claims in Investor Materials (UK)
- Gasilov Group Editorial Team
- Jan 18
- 9 min read
Capital raising narratives and sustainability messaging are now being assessed against conduct standards and financial-promotion expectations, not just reputational risk. In the UK, the FCA’s anti-greenwashing rule is already in force for FCA-authorised firms, and the Sustainability Disclosure Requirements (SDR) regime adds product labels and naming and marketing rules that tighten what can be said, how it must be evidenced, and what has to be disclosed. For corporate communications teams supporting investor relations, treasury, and M&A, that combination creates a practical shift: sustainability language in decks, prospectuses, and fund-facing materials needs a comparable discipline to financial claims: defined scope, traceable evidence, and controlled approvals.
What the FCA anti-greenwashing rule changes for corporate communications
The FCA’s anti-greenwashing rule (in the ESG Sourcebook) requires that any reference a firm makes to the sustainability characteristics of a product or service must be consistent with those characteristics, and must be fair, clear, and not misleading. The FCA’s finalised guidance FG24/3 confirms the rule came into force on 31 May 2024, and it explains the FCA’s expectations for how firms evidence, qualify, and present sustainability-related claims.
As such, the meaning is that corporate comms teams cannot treat sustainability language as brand copy when it will be reused by FCA-regulated intermediaries. Underwriters, placing agents, banks, and asset managers will ask for support packs because their own communications and client-facing materials sit inside the FCA perimeter. Even when a corporate issuer is not FCA-authorised, its claims can become part of an authorised firm’s “reference” to sustainability characteristics, which often means the issuer’s narrative is scrutinised inside the authorised firm’s evidencing and approvals workflow.
Also, corporate teams should treat visuals and framing as claim content, not decoration. The FCA explicitly addresses images in its anti-greenwashing guidance, which matters because sustainability messaging commonly relies on nature imagery and implied benefits. The practical implication is straightforward: if the image or headline creates a broad impression, the evidence file must support the impression, not just the footnote.
A concrete UK example helps illustrate how regulators assess “omitted context.” In October 2022, the UK Advertising Standards Authority upheld complaints against HSBC ads, finding that the ads omitted material information and risked misleading consumers about HSBC’s overall contribution to emissions. The documented fact here is an advertising ruling, not an FCA enforcement action. The implication for FCA-scoped communications is still useful: if a claim highlights a narrow positive while the wider footprint is material, the omission risk moves from reputational to regulatory.
Proof checklist for investor-facing sustainability claims (FCA anti-greenwashing)
Use this on every sustainability claim that may appear in IR decks, prospectuses, press releases, or roadshow scripts.
1) Claim type
Absolute (eg “we are net zero”)
Comparative (eg “30% lower than peers”)
“Aligned” (eg “Paris-aligned”, “taxonomy-aligned”)
“Net zero” or “carbon neutral”
“Impact” (eg “delivered X outcomes”)
Offset-backed (eg “neutral via offsets”)
2) Scope and boundary
What entity is covered (group, subsidiary, JV, portfolio, product line)
What activities and geographies are included and excluded
What “scope” is implied for emissions claims (Scope 1, 2, and whether Scope 3 is included)
3) Methodology and source
Calculation method or standard used (and why it is appropriate)
Primary data vs estimates/proxies, plus key assumptions
Source provenance (systems, vendors, datasets) and any assurance or verification
4) Time period and update controls
Reporting period and “as of” date for the claim
How often it will be refreshed, and who owns updates
What triggers a correction (restatement, boundary change, methodology change)
5) Limitations and falsifiability
Plain-language limitations that do not contradict the headline
What would make the claim misleading (missing context, boundary gaps, reliance on uncertain estimates)
What evidence would falsify the claim, and what you would change if challenged
How SDR labels reshape what comms can say to investors
The FCA’s SDR and investment labels regime (PS23/16) introduced four labels for UK asset managers: Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals. The FCA also states that managers of UK-based investment funds have been able to use investment labels since 31 July 2024, and that the naming and marketing and disclosure rules come into force from 2 December 2024, with limited temporary flexibility in certain cases until 2 April 2025.
The interpretation is that corporate issuers should expect more structured diligence questions from labelled funds and from funds constrained by naming and marketing rules. PS23/16 sets a high bar for what qualifies as “sustainable” in a label context. For example, Sustainability Focus requires at least 70% of assets to meet a robust, evidence-based standard that is an absolute measure of sustainability. When a fund manager must defend that threshold and standard, issuer-level claims that are vague, purely aspirational, or weakly evidenced will be discounted fast, even if they would have passed a marketing sniff test two years ago.
This is where teams should explicitly separate data acceptable for sourcing decisions from data acceptable for external claims. A fund or bank may use modelled estimates, sector averages, or screening flags to prioritise research, which can be decision-grade for internal triage if it is documented, repeatable, and bounded with clear uncertainty. External-facing claims, by contrast, need defensible substantiation that a third party can audit and that can survive challenge, at minimum: defined scope and boundary, a stated methodology, source provenance, and controls over updates. We have seen sustainability narratives fail when the evidence file mixes these two categories and treats a screening assumption like public-proof.
Given this shifting UK sustainability reporting and SDR landscape, a useful midpoint discipline is to run an internal “sanity check” of your top ten investor-facing sustainability claims against the evidence you could share under NDA, then rewrite any claim that cannot be supported without handwaving. That exercise usually reveals where language has outrun governance, especially in capital raising materials where speed pressures are real.
Where corporate comms and IR can trip: issuer narratives get reused inside the FCA perimeter
The SDR labels and the naming and marketing rules are designed for UK asset managers and certain distributors, not for corporates issuing shares or bonds. The interpretation is that issuers still feel the impact because fund managers, banks, and distributors will reuse issuer materials in their own FCA-scoped communications, and those firms will demand clearer substantiation and tighter wording than many issuers have historically produced.
Third, companies should assume that “green” and “sustainable” language will be treated as a controlled term set, not a stylistic choice. The fact is that the FCA has stated the SDR “raises the bar” and has set specific implementation dates for the naming and marketing and disclosure rules, with temporary measures announced in September 2024. The interpretation is that comms teams need an internal lexicon that maps preferred phrases to a defined evidence threshold, plus a fast path for legal and compliance escalation when a claim would change investor expectations.
If independence would strengthen governance, a focused external pressure test can be a practical way to identify which claims create the highest regulatory exposure and which evidence gaps matter most.
Implications for capital raising: prospectuses, roadshows, and sustainable finance instruments
The EU’s European Green Bond framework is in force at EU level and applies from 21 December 2024, with requirements tied to bonds that use the “European Green Bond” designation and with optional templates for other bonds marketed as environmentally sustainable or sustainability-linked in the Union. The interpretation is that cross-border capital raising now sits inside overlapping expectations: FCA standards for FCA-authorised firms marketing to UK clients, and EU rules and templates that can shape what European investors expect to see.
Fourth, companies should build a simple “claims register” before the next raise, because capital markets materials amplify weak claims quickly. A claim register is decision-grade, at minimum, when it has a named owner, a fixed scope boundary, a data lineage note, and a timestamped evidence pack that can be reproduced. External-claim-grade evidence adds at least three extra criteria: a defined methodology that can be shared, documented controls for updates and corrections, and a clear explanation of limitations that does not contradict the headline.
A useful internal chart for this is a one-page “Claim-to-Evidence map” that separates (1) what investors may use for sourcing decisions and (2) what the company may use for external claims. Teams should not assume those buckets are interchangeable. Screening estimates and sector proxies can be legitimate for prioritising diligence, but they are fragile as public-facing proof.
Fifth, companies raising via green bonds or sustainability-linked bonds should align comms with the operating model of the instrument, not just the press release. The documented fact is that the ICMA Green Bond Principles recommend post-issuance reporting on use of proceeds and encourage external review and verification practices to support transparency. As a result, comms teams should treat allocation reporting and impact reporting as core message infrastructure, because investors will test whether the use-of-proceeds narrative survives after funds move.
A real-world public model for this governance is the UK Government Green Financing Framework approach, which sets eligibility categories, commits to allocation and impact reporting, and has been updated over time. The transferable element is not the scale or the sovereign balance sheet. It is the discipline of defining eligible spend, ring-fencing processes, and publishing follow-through.
Global spillovers: why UK sustainability reporting teams cannot ignore the US and Australia
The SEC voted on 27 March 2025 to end its defence of the climate-related disclosure rules that were adopted in March 2024, in the context of ongoing litigation. The interpretation is that US disclosure expectations can remain volatile, which increases the value of having a stable internal evidence architecture that does not depend on a single jurisdiction’s rulemaking outcome. This matters for dual-listed issuers and for any company marketing to US investors, even if the raise is anchored in London.
Australia’s regulators have published concrete findings on greenwashing risk: the ACCC reported in March 2023 that 57% of 247 businesses reviewed in its sweep had concerning environmental claims, and ASIC has reported on greenwashing interventions covering 1 April 2023 to 30 June 2024. As such, “ESG in Australia” is now an enforcement-led topic, which is relevant for any issuer using global sustainability messaging across markets.
A tighter operating model for communications
In our experience, sustainability language breaks during a raise when speed wins over governance and the evidence pack is split across teams with no single accountable owner. The fix is not a giant methodology. It is a compact operating model:
First, companies should define a short list of “capital markets claims” that are allowed in roadshows and press, each with a fixed scope and an evidence file.
Second, companies should set escalation rules for any absolute-sounding claim, any claim that implies a counterfactual, and any claim that relies on offsets.
Third, companies should align the CFO narrative, the sustainability narrative, and the risk narrative so that omissions do not become the story.
Closing thought
The practical goal is not perfect sustainability storytelling. It is controlled, evidence-led communications that hold up under investor due diligence, FCA expectations, and cross-border scrutiny.
If you are preparing a raise, updating a sustainable finance framework, or tightening “UK sustainability reporting” controls across IR and marketing, contact Gasilov Group for tailored support on FCA-aligned claim substantiation, SDR-aware messaging, and investor-ready disclosure strategy.
Reviewed by: Arif Gasilov, Partner – Sustainability Strategy & ESG Compliance
Leads ESG and environmental strategy with a background shaping sustainability frameworks, regulatory analysis, and climate resilience programs across public and private sectors.
Frequently Asked Questions (FAQ): FCA Anti-Greenwashing and SDR Labels
1) How does the FCA anti-greenwashing rule affect corporate issuers that are not FCA-authorised?
The rule applies to FCA-authorised firms, but corporate issuer content is frequently reused by authorised banks, asset managers, and distributors in UK client communications. The practical impact is that those firms will request stronger substantiation, clearer scope boundaries, and tighter wording from issuers to reduce their own regulatory exposure.
2) What evidence is acceptable for investor sourcing decisions versus external sustainability claims in a UK roadshow?
Sourcing decisions can use provisional, modelled, or proxy data if it is documented, repeatable, and clearly bounded. External claims need defensible substantiation, including defined scope, disclosed methodology, source provenance, and controls over updates and corrections. Treating screening assumptions as public proof is a common failure mode in capital raising because it collapses two different evidence standards into one.
3) Can a company say its bond is “green” if it follows ICMA principles but does not use the EU Green Bond label?
ICMA principles are voluntary market guidelines, and many issuers use them to structure use-of-proceeds governance and reporting. The EU Green Bond designation is a regulated label within the EU framework that applies from 21 December 2024. If you are not using the EU label, ensure your wording does not imply compliance with the EU regime, and ensure your promised reporting and verification practices match what you actually deliver.
4) What changed with FCA SDR labels, and why do they matter to issuers speaking to UK funds?
The FCA created four labels for UK asset managers and added naming and marketing and disclosure rules with set implementation dates. Labelled funds and funds constrained by the naming rules are likely to ask more structured questions about issuer transition plans, data quality, and claim substantiation because they must defend their own positioning and disclosures.
5) What should a CFO ask for before signing off sustainability language in an equity raise or refinancing deck?
Ask for a short list of approved capital markets claims, each linked to an evidence file that can be shared under NDA, with a named owner and a date stamp. Ask whether each claim is based on external-claim-grade evidence, or whether it is decision-grade only and must be reframed as an assumption or forward-looking intent. This prevents misalignment between the financial narrative and sustainability narrative that can trigger investor challenge.
