Schroders Leads Adoption Of FCA Sustainability Labels

Schroders, global leader in active investment management, has just announced its full adoption of all four of the labels in the Financial Conduct Authority's (FCA) Sustainability Disclosure Requirements (SDR) for applicable funds. The bold move cements Schroders as a pioneer in sustainable investment and marks the firm's unwavering commitment to creating clarity and integrity in sustainable financial products.

The adoption spans 16 funds, including notable offerings from Schroders' high-net-worth wealth management arm, Cazenove Capital. This sweeping take on the SDR framework is set to simplify sustainable investing for clients, making it easier for them to find the right funds in line with their ESG objectives.

Anna O'Donoghue, Schroders' global head of product development and governance, added: "We believe we are the first firm to publicly confirm the intended adoption of all four SDR labels across all the funds we have sought them for. We have been an early adopter of SDR, working closely with the FCA throughout to ensure our funds adhere to the required standards.

The SDR labels introduced by the FCA are designed to increase transparency in sustainable investing and, therefore, will help investors evaluate the sustainability credentials of funds with a clearer framework. By embracing these labels, Schroders is, in effect, setting the industry benchmark as its offerings now conform to the changing needs of clients who seek ESG values.

The Schroders sustainable fund labels come in four categories.

•  Sustainability Focus: This is an award given to investments with a focus on certain sustainability themes. Among them are Schroder Global Cities Real Estate and Schroder Global Sustainable Growth Fund.

• Sustainability Impact: Their objective is that funds made under this category have to generate measurable positive social or environmental impacts. Schroder BSC Social Impact Trust plc is an example of this.

•\tSustainability Improvers: Such funds, including the Schroder European Sustainable Equity Fund, aim to invest in companies that are actively improving their ESG practices.

\t•\tSustainability Mixed Goals: This label represents funds that balance various sustainable objectives, such as the Schroder Sustainable Future Multi-Asset Fund.

This latest development follows Schroders' earlier pledge to adopt sustainable investing. In December, the firm committed to labelling 10 funds with SDR labels, making it one of the first movers in embracing the initiative launched by the FCA. Confirmation for three Cazenove Capital funds further embeds Schroders at the forefront of this field.

These labels would be highly useful in telling Schroders' story of having a sustainable product range. "The labels will help differentiate our sustainable product range, focused on delivering active outperformance. This means clients seeking sustainable outcomes can more easily find opportunities to invest," she said.

Schroders' embrace of the SDR framework speaks to forward-looking sustainable investing. As more and more global investors focus on ESG factors, the commitment by Schroders to have its products in line with those values demonstrates that it can look ahead to and meet the market's demands. This proactive position not only solidifies Schroders' position as a leader in the industry but also underscores its dedication to making positive change through investment.

The move also speaks to Schroders' long-term plan in mainstreaming sustainability in core business operations. By being an active participant with the FCA in ensuring adherence to the SDR framework, the company has played a leading role in being a pioneer of sustainable investing. Leaders in this context go beyond mere regulation compliance, as Schroders try to shape the overall finance industry, nudging it on higher standards for transparency and accountability.

Schroders' SDR adoption is clearly beneficial for clients. The labels help to navigate the increasingly complex landscape of sustainable investment, enabling investors to make informed decisions that align with their personal and professional values. Whether focusing on sustainability themes, impact-driven outcomes, or improving ESG performance, Schroders' diverse range of labeled funds ensures that clients can find solutions tailored to their needs.

The introduction of the SDR labels is an important step forward for the investment industry, and Schroders' pioneering adoption sets a high standard for others to follow. With these labels, Schroders is demonstrating its commitment to sustainability in addition to reaffirming its role as a trusted partner for clients who want to invest in a better future.

As sustainable investing becomes increasingly important, Schroders' leadership in adopting the FCA's SDR framework sets a benchmark for the industry. The firm's proactive approach and commitment to the highest standards of transparency and integrity ensure that it remains at the forefront of this critical movement. Through its adoption of SDR labels, Schroders is not only shaping the future of sustainable investment but helping define it.