FCA rules · ESG 4.3.1R
The FCA anti-greenwashing rule: who it binds, and what it does not reach
The FCA anti-greenwashing rule, ESG 4.3.1R, is the one FCA sustainability rule that reaches every authorised firm — bank, insurer, asset manager or pension provider.
It is narrower than most commentary suggests: it covers what a firm says about its products and services, not what it says about itself.
It sits beside, not inside, the separate naming rules that govern how a fund may describe itself.
The rule
The rule itself, in full
ESG 4.3.1R(2) is short: “A firm must ensure that any reference to the sustainability characteristics of a product or service is: (a) consistent with the sustainability characteristics of the product or service; and (b) fair, clear and not misleading.”
It binds all firms: ESG 3.1.2R(1) says “ESG 4.1.1R(1) and ESG 4.3.1R apply to all firms”, not only managers that run labelled funds.
A bank marketing a green mortgage, an insurer describing a policy’s sustainability credentials and a pension provider’s default fund literature are in scope on the same terms as a fund factsheet.
The rule applies where a firm communicates with a client in the United Kingdom about a product or service, or communicates or approves a financial promotion for a person in the United Kingdom.
For a firm’s marketing team, that makes every sustainability line in a campaign a compliance item.
The same pressure is reaching non-financial companies through the CMA’s Green Claims Code — see sustainability in go-to-market for how B2B sales and marketing teams are adapting.
It reaches mandates as well as marketing: public pension pools and other public bodies appoint managers through formal procurement, and sustainability answers in those public sector tenders are held to the same standard.
Firms that bid often keep those answers in RFP software so every submission says the same thing, and smaller firms without a finance lead to sign them off sometimes hire a fractional CFO.
Dates and guidance
When the rule exists, and when it applies
The rule came into force on 28 November 2023 with PS23/16, but ESG TP 1.8R fixes a later date for it to bite: it “applies from 31 May 2024”.
The gap between a provision existing and a provision applying is easy to collapse into one date; here it was six months.
The FCA’s guidance is FG24/3, finalised on 23 April 2024 after consultation as GC23/3; the publication page still carries the GC23/3 address.
FG24/3 is non-Handbook guidance and, in its own words, does not create new obligations for firms.
The FCA’s own climate-change-and-sustainable-finance hub cites “FG24/2” for this guidance; FG24/2 is guidance for firms supporting mortgage borrowers, and the correct reference is FG24/3.
ESG 4.3.1R itself has been amended once, on 28 February 2025, when the FCA broadened the meaning of “communicates” and made clear the two UK gates are alternatives.
- 28 Nov 2023Rule made and in force
Published with PS23/16.
- 23 Apr 2024FG24/3 finalised
Non-Handbook guidance, consulted on as GC23/3.
- 31 May 2024Rule applies
ESG TP 1.8R.
- 28 Feb 2025ESG 4.3.1R last amended
Wording on “communicates” broadened.
Sources: FCA Handbook ESG TP 1; FG24/3
Limits
Four things the rule does not cover
The commonest misreading of ESG 4.3.1R is to treat it as a general duty to be honest about sustainability. On its own terms it is narrower.
Excluded communications and third-party prospectuses
Carved out on the face of the rule — a limb most commentary drops.
Claims a firm makes about itself
The rule relates to products and services; firm-level claims fall under the Principles, the Consumer Duty and the CMA and ASA regime.
Communications outside the UK gates
Both limbs need a UK client or a UK recipient of a financial promotion.
Unauthorised firms
The rule applies to products and services FCA-authorised firms make available to UK clients.
The second limit is the one most often missed: a firm-level net zero pledge is not caught by ESG 4.3.1R at all.
What a firm says about itself is covered by the FCA’s Principles 6 and 7 and, where relevant, the Consumer Duty, which FG24/3 names.
Outside financial regulation it is covered by consumer law — Part 4 of the Digital Markets, Competition and Consumers Act 2024 — read with the CMA’s Green Claims Code and the ASA’s CAP Code section 11.
Naming and marketing
The naming rules: thirteen restricted terms
Beside the anti-greenwashing rule, in the same section of the Handbook, is a narrower rule aimed at retail fund names and financial promotions.
ESG 4.3.2R(2) restricts thirteen terms: “ESG”, “environment” or “environmental”, “social”, “climate”, “sustainable” or “sustainability”, “green”, “transition”, “net zero”, “impact”, “responsible”, “sustainable development goals” or “SDG(s)”, and “Paris-aligned” — plus any other term implying sustainability characteristics.
It is triggered where a manager undertakes sustainability in-scope business for retail clients and uses those terms in a product’s name or a financial promotion about its sustainability characteristics.
Short factual statements that are not financial promotions, and uses not meant to describe sustainability — the FCA’s examples are “financial impact” and “economic climate” — are carved out.
Since 25 September 2026 a third carve-out in ESG 4.3.2R(3)(c) lets a manager use the terms to meet the new climate-risk disclosure duty in ESG 2.3.1BR, including in a financial promotion (Handbook Notice 144).
A labelled product’s 70% asset threshold is a rule; for an unlabelled product, ESG 4.3.6G(1) gives 70% only as an example inside guidance, so presenting it as binding overstates the Handbook.
The naming rules take effect for a manager on the earlier of first using a label or 2 December 2024 — a long-stop, not a start date — and the label-specific tests are on the FCA SDR investment labels page.
From 1 January 2026 the FRC’s UK Stewardship Code includes “sustainable” in its definition of stewardship; the FCA and FRC do not consider this conflicts with the naming rules, which apply only where a term describes a sustainability product.
| Term | Unlabelled fund may use it in its name? |
|---|---|
| Sustainable, sustainability | No |
| Impact | No (and not with Focus, Improvers or Mixed Goals labels) |
| ESG, environmental, social, climate, green, transition, net zero, responsible, SDG(s), Paris-aligned | Yes, on ESG 4.3.5R’s conditions |
| Any other term implying sustainability characteristics | Judged case by case — limb (m) is open-ended |
Across financial services
Portfolio managers, and everyone else with FCA authorisation
The labelling regime and naming rules have not been extended to portfolio management: the FCA’s 2024 proposal, CP24/8, was not finalised.
The anti-greenwashing rule is different in kind, because it binds all firms rather than only managers using a label or a restricted term.
It already applies in full to portfolio managers, and the FCA reminded them of it when it set CP24/8 aside.
For a bank, it reaches every product claim, from green mortgages to sustainability-linked loans, alongside the financed-emissions reporting on the UK SRS for banks page.
For an insurer, it reaches how a policy or investment product is described, alongside the reporting on the UK SRS for insurers page.
For a fund manager, it sits beside SDR and the TCFD rules covered on the UK SRS for asset managers page.
Not UK SRS
None of this is UK SRS
UK SRS is corporate reporting: what a company discloses about its own sustainability-related risks and opportunities.
The FCA consulted on applying it to listed companies in CP26/5 and published final comply-or-explain rules in PS26/19 on 30 September 2026, for accounting periods beginning on or after 1 January 2027.
The anti-greenwashing rule and the naming rules are already live Handbook rules, and they govern communications about products and services.
A listed bank’s UK SRS report is not a product communication, but a sustainability claim in the bank’s mortgage advertising is.
The family’s fuller explainer of the whole SDR and anti-greenwashing regime, including enforcement, is FCA SDR and anti-greenwashing on the UK SRS hub.
This page is an independent reference to the FCA’s published rules and guidance.
It is not legal or regulatory advice on any particular claim; you can book a free 15-minute call to talk one through.
Frequently asked
Questions people ask
What is the FCA anti-greenwashing rule?
ESG 4.3.1R in the FCA Handbook. It requires a firm to ensure that any reference to the sustainability characteristics of a product or service is consistent with those characteristics and is fair, clear and not misleading.
Who does the FCA anti-greenwashing rule apply to?
All FCA-authorised firms. ESG 3.1.2R(1) says ESG 4.1.1R(1) and ESG 4.3.1R apply to all firms, not only fund managers, so banks, insurers, asset managers and pension providers are all bound when they refer to the sustainability characteristics of a product or service.
When did the anti-greenwashing rule start applying?
The rule came into force on 28 November 2023, but ESG TP 1.8R says it applies from 31 May 2024. The six months between the two dates were the lead-in time for firms.
Does the anti-greenwashing rule cover what a firm says about itself?
No. The FCA’s guidance, FG24/3, says the scope of the rule relates to products and services. Claims a firm makes about itself as a firm — a net zero pledge, for example — fall under the FCA’s Principles 6 and 7, the Consumer Duty where relevant, and the CMA and ASA green-claims rules.
What is FG24/3?
FG24/3 is the FCA’s finalised non-Handbook guidance on the anti-greenwashing rule, published on 23 April 2024 after consultation as GC23/3. It explains how the FCA expects firms to apply the rule and says it does not create new obligations. It is guidance, not a rule.
Does the rule apply to communications outside the UK?
It has two UK gates: it applies where a firm communicates with a client in the United Kingdom about a product or service, or communicates or approves a financial promotion for a person in the United Kingdom. Excluded communications and third-party prospectuses are carved out on the face of the rule.
How many sustainability terms are restricted in fund names?
Thirteen, under ESG 4.3.2R(2), including an open-ended catch-all for any other term implying sustainability characteristics. Only three — “sustainable”, “sustainability” and “impact” — are reserved for labelled funds; the other ten remain open to unlabelled funds that meet ESG 4.3.5R’s conditions.
Can an unlabelled fund call itself “sustainable”?
No. An unlabelled fund may not use “sustainable”, “sustainability” or “impact”, or any variation of them, in its name (ESG 4.3.5R). It may use the other restricted terms if its name accurately reflects genuine sustainability characteristics and it publishes the prescribed disclosures, including the statement “This product does not have a UK sustainable investment label”.
Did the anti-greenwashing rule change in September 2026?
No. The FCA amended ESG 4.3 on 25 September 2026, but the change was to the naming and marketing rule, ESG 4.3.2R, which now lets a manager use the restricted terms to meet a new climate-risk disclosure duty. ESG 4.3.1R itself was last amended on 28 February 2025.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Financial Conduct AuthorityFCA Handbook ESG 4.3.1R — the anti-greenwashing rule (as at 20 August 2026)
ESG 4.3.1R(1) scope and UK gates; ESG 4.3.1R(2) the obligation.
- Financial Conduct AuthorityFCA Handbook ESG 4.3 — as amended 25 September 2026
ESG 4.3.1R unchanged (last amended 28 February 2025); ESG 4.3.2R(3)(c) added.
- Financial Conduct AuthorityFCA Handbook ESG 3.1.2R(1) — application to all firms
“ESG 4.1.1R(1) and ESG 4.3.1R apply to all firms.”
- Financial Conduct AuthorityFCA Handbook ESG TP 1.8R–1.9R — transitional provisions
Applies from 31 May 2024; naming rules from the earlier of first label use or 2 December 2024.
- Financial Conduct AuthorityFG24/3 — Finalised non-Handbook guidance on the anti-greenwashing rule (PDF)
¶1.14 no new obligations; ¶2.5 authorised firms; ¶2.15 products and services, not firm-level claims.
- Financial Conduct AuthorityFG24/3 publication page (consulted on as GC23/3)
Finalised guidance published 23 April 2024.
- Financial Conduct AuthorityPS23/16 — Sustainability Disclosure Requirements (SDR) and investment labels
Chapter 4: the anti-greenwashing rule as made.
- Financial Conduct AuthorityCP24/8 — Extending the SDR regime to portfolio management
Not finalised; the FCA reminds firms the anti-greenwashing rule applies.
- Financial Conduct AuthorityHandbook Notice 144 (September 2026)
FCA 2026/59, in force 25 September 2026, amending ESG 4.3.
- Financial Conduct AuthorityCP26/5 — listed issuers’ sustainability disclosures
The UK SRS proposals for listed companies.
- Financial Conduct AuthorityPS26/19 — final UK SRS rules for listed issuers (30 September 2026)
Corporate reporting, a different regime from the anti-greenwashing rule.
- legislation.gov.ukDigital Markets, Competition and Consumers Act 2024, Part 4
Unfair and misleading commercial practices, in force 6 April 2025.
- Competition and Markets AuthorityGreen Claims Code (CMA146)
The CMA’s principles for environmental claims.
- ASACAP Code, section 11 — Environmental claims
The advertising rules the ASA applies.