For investors who want to buy sustainable funds but worry about greenwashing there is good news this Isa season: it’s the first year they will be able to invest in products with a new official label.
Fund managers have a deadline of April 5 to decide whether to give their funds one of four new labels developed by the Financial Conduct Authority in response to concerns that retail investors might be buying supposedly sustainable products that weren’t doing what they said on the tin.
So far, at least 113 funds plan to use either an Improvers, Focus, Impact or Mixed Goals label, with others in the process of getting one. This will shrink the universe of sustainable funds, as many existing funds — Morningstar counted more than 400 last year — will need to stop using sustainable terms to describe themselves.