M&G Investments’ climate-focused fund range has been awarded the UK’s new ‘Sustainability Improvers’ label, underscoring the firm’s ongoing commitment to responsible investing and climate action.
The designation, part of the UK Financial Conduct Authority’s (FCA) new Sustainability Disclosure Requirements (SDR) and investment labelling regime, is designed to bring greater clarity and transparency to green investment products for retail investors and financial advisers. The ‘Sustainability Improvers’ label specifically recognises funds that invest in companies actively working to improve their environmental credentials, rather than those already deemed sustainable.
M&G’s newly labelled range includes the M&G Global Sustain Paris Aligned Fund, M&G European Sustain Paris Aligned Fund, and M&G UK Sustain Paris Aligned Fund. These funds are managed by John William Olsen, Head of Sustain and Impact Equities, and Rory Alexander. According to M&G, at least 70% of the holdings in each fund are comprised of companies that are aligned with the goals of the Paris Agreement and are taking tangible steps toward achieving net zero emissions.
Olsen said the designation validates the firm’s approach to sustainable investing and its emphasis on engagement. “We are thrilled that our Paris Aligned Fund range is among the first of their type to have achieved the Sustainability Improvers label, underscoring the importance of transparency and accountability in sustainable investing,” he commented.
The funds focus on identifying companies that, while not yet meeting all sustainability benchmarks, are demonstrably on a credible path to improve their environmental impact. This includes businesses that are reducing their carbon footprints and adopting science-based targets in line with a net-zero trajectory. Independent initiatives such as the Science Based Targets initiative (SBTi) have become increasingly influential in helping investors assess the credibility of corporate climate commitments.
Alex Matcham, M&G’s Head of UK Wholesale Distribution, noted the benefit for investors: “This label will help advisers and wealth managers with their due diligence and, crucially, provide transparency to retail investors on the nature of the underlying holdings and the fund’s objective.”
The FCA introduced the sustainable investment labelling regime in November 2023 as part of its broader efforts to tackle greenwashing in financial services. The labelling system, which took effect in July 2024, includes four distinct categories: Sustainability Focus, Sustainability Improvers, Sustainability Impact, and a general ‘Sustainability Mixed’ label. These are intended to help investors better understand how their money is being used and whether it aligns with their personal values and sustainability goals.
M&G has been an early adopter of the FCA’s labelling framework. In addition to the new ‘Sustainability Improvers’ designation, its M&G Positive Impact Fund was previously awarded the ‘Sustainability Impact’ label, which is reserved for funds that target measurable, positive sustainability outcomes.
As demand for ESG-aligned financial products continues to grow, asset managers are under increasing pressure to demonstrate the environmental integrity of their offerings. According to the Investment Association, UK ESG fund assets totalled more than £100 billion at the end of 2023, and are expected to continue expanding as regulatory expectations and investor scrutiny rise.
For more on the FCA’s sustainability labelling regime, see the FCA’s official guidance: https://www.fca.org.uk/publications/policy-statements/ps23-16-sustainability-disclosure-requirements-investment-labels
Read the original ESG News article here: https://esgnews.com/mgs-climate-focused-fund-range-secures-sustainability-improvers-label-in-uk/
