International investment manager M&G Investments announced that it will adopt the new “Sustainability Improvers” label introduced by the UK Financial Conduct Authority (FCA)’s Sustainability Disclosure Requirements (SDR) for its Sustain Paris Aligned range of climate mitigation-focused investment funds.

The FCA’s SDR regulations were introduced by in November 2023, aimed at helping investors assess the sustainability attributes of investment products, and to avoid greenwashing risk. The SDR included naming and marketing rules for investment products, which take effect in April 2025, requiring that sustainability-related terms can only be used in product names and marketing if a label is used.

The FCA rules introduce four labels intended to help consumers to differentiate between the sustainability objectives and investment approaches of investment products, including Sustainability Improvers, investing in assets that have the potential to improve environmental and/or social sustainability over time. Additional labels include Sustainability Focus, for products that aim to invest in assets that are environmentally and socially sustainable; Sustainability Impact, investing with an aim to achieve a predefined positive and measurable environmental or social impact, and; Sustainability Mixed Goals, for funds that invest across different sustainability objectives and strategies aligned with the other categories. The rules include a series of criteria for products to use the labels, including a requirement for at least 70% of the products assets to ordinarily be invested in line with the label’s objective, as well as ongoing product-level disclosures for products using a label.

The FCA recently said that over 100 funds have announced plans to adopt the labels. In January, BlackRock launched the first fund to use the Sustainability Improvers label, and Schroders announced plans shortly afterwards for a Sustainability Improvers-labelled funds, becoming the first asset manager to adopt all four labels.

Alex Matcham, Head of UK Wholesale Distribution, M&G Investments, said:

“Being amongst the first to label in the Sustainability Improvers category underlines M&G’s commitment to sustainability investing and providing choice to our clients looking at investing this area. This label will help advisors 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.”

M&G’s Sustain Paris Aligned fund range includes three funds, including a Global, a European and a UK fund. The funds actively engage with investee companies to sustain their climate reduction efforts, in addition to seeking to outperform their benchmarks. According to M&G, the funds support the mitigation of climate change by investing primarily in companies that contribute towards the Paris Agreement climate change goal and have the potential to decarbonize their operations over time and ultimately reach net zero.

John William Olsen, Head of Sustain and Impact Equities, M&G Investments said:

“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. Through these funds we are actively investing in companies that are making measurable progress towards a net zero economy and have business models competitively positioned to protect their profitability.”