Schroders has announced it is set to adopt all four of the Financial Conduct Authority’s (FCA) Sustainability Disclosure Requirements (SDR) labels for 16 of its funds.
All four ‘Sustainability Focus’, ‘Sustainability Impact’, ‘Sustainability Improvers’ and ‘Sustainability Mixed Goals’ labels will be used.
In December 2024, Schroders said it planned to adopt ‘Sustainability Focus’ and ‘Sustainability Impact’ labels for 10 of its funds.
It planned to adopt ‘Sustainability Focus’ label for the following funds:
- Schroder Global Sustainable Value Equity
- Schroder Global Sustainable Growth
- Schroder Global Energy Transition
- Schroder Sustainable UK Equity
- Schroder Global Sustainable Food and Water
- Schroder Multi-Factor Equity
- Schroder Sustainable Bond
- Greencoat UK Wind plc
It also planned to adopt the ‘Sustainability Impact’ label for:
- Schroders Capital Real Estate Impact Fund (SCREIF)
- Schroder BSC Social Impact Trust plc.
As part of today’s (27 January) announcement, Schroders confirms that:
- Schroder Sustainable Future Multi-Asset Fund will adopt the Sustainability Mixed Goals label.
- Schroder European Sustainable Equity Fund will adopt the Sustainability Improvers label.
- Schroder Global Cities Real Estate fund will adopt the Sustainability Focus label.
Additionally, Cazenove Capital will adopt the SDR ‘Sustainability Focus’ labels for three of its funds. Cazenove Capital is the high-net-worth wealth-management business of Schroders.
The three funds are:
- SUTL Cazenove Charity Sustainable Multi-Asset Fund
- SUTL Cazenove Sustainable Growth Fund
- SUTL Cazenove Sustainable Balanced Fund
Schroders global head of product development and governance Anna O’Donoghue said: “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. We are appreciative of the FCA’s ongoing collaboration.
“The labels will help to differentiate our sustainable product range focused on delivering active outperformance, making it easier for clients who are seeking sustainable outcomes to identify opportunities to invest.”
In November 2024, Schroders became one of the first UK asset managers to confirm its intention to adopt an SDR ‘Sustainability Focus’ label for an equity fund.
One of the main aims behind the SDR is to “improve the trust and transparency of sustainable investment products and minimise greenwashing”.
Greenwashing is defined as the act of “making people believe that your company is doing more to protect the environment than it really is”.
Schroders might be touting its adoption of all four FCA SDR labels, but has anyone checked the performance of these funds? It’s abysmal. For example, Schroder Global Sustainable Value Equity and Global Energy Transition consistently underperform, and Greencoat UK Wind plc trades at a steep discount to its net asset value.
Slapping sustainability labels on funds doesn’t fix poor returns. If you’re in doubt, just look them up on Morningstar. Labels don’t pay the bills—performance does.