FCA statement on sustainability regulations and UK defence

The UK Financial Conduct Authority (FCA) has published a statement confirming that there is nothing in its rules, including its sustainability rules, that prevents investment in or finance for defence companies. The FCA confirms that it is up to individual lenders and investors whether they provide capital to defence companies.

The FCA's sustainability-related rules and regulations include: (i) its Sustainability Disclosure Requirements (SDR), including rules on investment labels for asset managers, and an anti-greenwashing rule applicable to all FCA-authorised firms; (ii) disclosure rules for listed issuers, asset managers and asset owners aligned with the Taskforce on Climate-related Financial Disclosures standards; and (iii) its proposed adoption of the International Sustainability Standards Board's standards in the UK. HM Treasury is also consulting on the proposed regulatory regime for ESG ratings providers. None of these rules require financial institutions to treat companies differently because they are in the defence sector.

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