1. (1)

   1A manager must prepare the disclosures in ESG 5.1.1R(2) in accordance with this chapter where it:

   1. (a)

      is undertaking sustainability in-scope business in relation to a sustainability product that is not a feeder fund; and

   2. (b)

      uses either a sustainability label or one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1) in relation to that product.

2. (2)

   The disclosures are:

   1. (a)

      a consumer-facing disclosure for retail clients as set out under ESG 5.2; and

   2. (b)

      a pre-contractual disclosure as set out under ESG 5.3.

1. (1)

   1A manager must ensure that the consumer-facing disclosure and the pre-contractual disclosure for the sustainability product remain consistent with the sustainability label or the terms set out in ESG 4.3.2R(2) that are used in accordance with ESG 4.3.2R(1) in relation to the product.

2. (1)

   A manager must keep a consumer-facing disclosure and a pre-contractual disclosure under review, as follows:

   1. (a)

      in relation to a consumer-facing disclosure, a manager must, at least every 12 months, review the disclosure and provide any updates as appropriate to ensure it accurately reflects the sustainability product – in particular:

      1. (i)

         the manager must, where it uses a sustainability label, at a minimum provide an update on the progress of the sustainability product in achieving its sustainability objective; and

      2. (ii)

         in providing any updates, the manager must ensure that up-to-date metrics and information are used;

   2. (b)

      in relation to a consumer-facing disclosure and a pre-contractual disclosure, a manager must review the disclosure prior to any proposed change to a sustainability product and make any updates as appropriate to ensure that it continues to reflect the sustainability product accurately.

1. (1)

   1This rule applies where a manager has revised a consumer-facing disclosure or a pre-contractual disclosure when either ceasing or revising the use of a sustainability label in relation to a sustainability product.

2. (2)

   The manager must publish, as soon as reasonably practicable, the information specified in ESG 5.1.3R(3) on the relevant digital medium for the business of the manager, in a prominent place on the specific webpage or page on a mobile application or other digital medium at which the sustainability product is offered.

3. (3)

   1The information which must be published in accordance with ESG 5.1.3R(2) is:

   1. (a)

      the revised consumer-facing disclosure or pre-contractual disclosure;

   2. (b)

      the reasons for the revision; and

   3. (c)

      in the case of a consumer facing disclosure, the date of the revised disclosure.

1A manager that is required to prepare and publish a consumer-facing disclosure under ESG 5.1.1R must include in the consumer-facing disclosure for the relevant product:

1. (1)

   where it uses a sustainability label in relation to a sustainability product, the information in ESG 5.2.2R; or

2. (2)

   where it does not use a sustainability label in relation to a sustainability product, but uses one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1), the information set out at:

   1. (a)

      ESG 5.2.2R(1) to ESG 5.2.2R(4), ESG 5.2.2R(7)(a) and (b), ESG 5.2.2R(8)(b) and (c) and ESG 5.2.2(9); and

   2. (b)

      ESG 4.3.5R(3)(a) to (c).

1For the purposes of ESG 5.2.1R, a manager must include the following information in the consumer facing disclosure which relates to a sustainability product:

1. (1)

   the manager’s name;

2. (2)

   the name of the sustainability product to which the consumer-facing disclosure relates;

3. (3)

   the date of the disclosure;

4. (4)

   the International Securities Identification Number (ISIN) or other unique identifier (if any) for that sustainability product;

5. (5)

   the sustainability product’ssustainability objective, clearly signposted as the ‘sustainability goal’ for that product, including a summary of:

   1. (a)

      any material effect (including expected effect) on the financial risk and return of the product as a result of the investment strategy the manager has adopted to pursue the product’s sustainability objective;

   2. (b)

      the product’s progress towards achieving its sustainability objective; and

   3. (c)

      any material negative environmental and/or social outcomes that may arise when pursuing the product’s sustainability objective, as identified under ESG 4.2.9R(1);

6. (6)

   the sustainability label which the manager is using in relation to that sustainability product, together with the relevant descriptor for that label, as follows:

   1. (a)

      for the sustainability label ‘sustainability focus’, the relevant descriptor is: ‘invests mainly in assets that focus on sustainability for people or the planet’;

   2. (b)

      for the sustainability label ‘sustainability improvers’, the relevant descriptor is: ‘invests mainly in assets that may not be sustainable now, with an aim to improve their sustainability for people or the planet over time’;

   3. (c)

      for the sustainability label ‘sustainability impact’, the relevant descriptor is: ‘invests mainly in solutions to sustainability problems, with an aim to achieve a positive impact for people or the planet’; and

   4. (d)

      for the sustainability label ‘sustainability mixed goals’, the relevant descriptor is: ‘invests mainly in a mix of assets that either focus on sustainability, aim to improve their sustainability over time, or aim to achieve a positive impact for people or the planet’ as appropriate;

7. (7)

   a summary of the manager’s investment policy and strategy in relation to the sustainability product’ssustainability characteristics (including, where relevant, the sustainability product’ssustainability objective) which uses plain English language to describe the policy and strategy effectively and accurately to retail clients and which:

   1. (a)

      is clearly signposted as the manager’s ‘sustainability approach’;

   2. (b)

      sets out the key sustainability characteristics of assets in which that sustainability product will and will not invest;

   3. (c)

      details any types of asset that the product invests in for reasons other than to pursue its sustainability objective and why the product invests in those assets; and

   4. (d)

      summarises the manager’s approach to investor stewardship in supporting the achievement of the sustainability product’ssustainability objective;

8. (8)

   a summary of the relevant metrics in relation to that sustainability product, calculated using the most up-to-date data available as at the time of preparing the consumer-facing disclosure, which is clearly signposted as the manager’s ‘sustainability metrics’ and sets out:

   1. (a)

      the product’s progress towards achieving the product’s sustainability objective, measured against the KPIs that the manager uses under ESG 4.2.4R(3);

   2. (b)

      any other metrics that a retail client might reasonably find useful in understanding the sustainability characteristics of the product; and

   3. (c)

      any relevant contextual information, such as an explanation of how the metrics in ESG 5.2.2R(8)(a) and (b) should be interpreted;

9. (9)

   details (including, as appropriate, hyperlinks) as to where a retail client can easily access the following information:

   1. (a)

      the relevant pre-contractual disclosure in relation to the sustainability product, including, where applicable, Part A of the public product-level sustainability report in relation to that product;

   2. (b)

      Part B of the public product-level sustainability report in relation to the product;

   3. (c)

      the manager’ssustainability entity report; and

   4. (d)

      other non-sustainability related information in relation to a sustainability product – for example, costs and charges that are associated with that product; and

10. (10)

    for a manager that uses the ‘sustainability mixed goals’ sustainability label, details as to the proportion of the sustainability product’s assets which are invested in accordance with each of the 2 or more sustainability objectives referred to in ESG 4.2.18R.

1A manager must ensure that the information at either ESG 5.2.1R(2)(b) or ESG 5.2.2R(5) (as applicable), together with the information at ESG 5.2.2R(6), is located in a prominent place at the front of the consumer-facing disclosure.

1A manager must ensure that a consumer-facing disclosure is clear, concise and can be easily read and understood by retail clients and that it does not exceed 2 pages of printed A4 paper in length.

1A manager must ensure it keeps a copy of each version of its published consumer-facing disclosure for a minimum of 5 years and provides a copy to a retail client or the FCA on request.

1. (1)

   1A manager must publish a consumer-facing disclosure on the relevant digital medium for the business of the manager in a prominent place on the specific webpage or page on a mobile application or other digital medium at which the sustainability product is offered.

2. (2)

   A manager must ensure that, in publishing a consumer-facing disclosure, it is easy for retail clients (including prospective retail clients) and distributors to:

   1. (a)

      identify the particular sustainability product to which the consumer-facing disclosure relates;

   2. (b)

      identify the relevant sustainability label (if any); and

   3. (c)

      access the information set out at ESG 5.2.2R(9).

1A manager that is required to prepare and publish a pre-contractual disclosure under ESG 5.1.1R must do so in a clear and accessible way and include that disclosure in either:

1. (1)

   the pre-contractual materials for the particular sustainability product; or

2. (2)

   where that product does not have pre-contractual materials, Part A of the public-product-level sustainability report relating to that product, as set out under ESG 5.5.1R to ESG 5.5.4R.

1. (1)

   1A manager must, where it uses a sustainability label in relation to a sustainability product, include in the pre-contractual disclosure for that product the information in ESG 5.3.3R and ESG 5.3.6R.

2. (2)

   A manager must, where it does not use a sustainability label in relation to a sustainability product, but uses one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1), include in the pre-contractual disclosure for that product:

   1. (a)

      the information at ESG 5.3.3R(3)(a) and ESG 5.3.3R(6); and

   2. (b)

      the information set out under ESG 4.3.5R(3)(a) to (c).

1For the purposes of ESG 5.3.2R, a manager must include the following information in the pre-contractual disclosure which relates to a sustainability product:

1. (1)

   the sustainability label that the manager is using in relation to the sustainability product;

2. (2)

   the sustainability product’ssustainability objective, as part of its investment objectives, including details as to:

   1. (a)

      any material effect (including expected effect), on the financial risk and return of the product as a result of the investment strategy the manager has adopted to pursue the product’s sustainability objective;

   2. (b)

      the link between the sustainability product’ssustainability objective and a positive environmental and/or social outcome; and

   3. (c)

      any material negative environmental and/or social outcomes that may arise when pursuing the product’s sustainability objective, as identified under ESG 4.2.9R(1);

3. (3)

   details of the manager’s investment policy and strategy – in particular:

   1. (a)

      how the manager determines the assets the product invests in, including the criteria it applies in determining the sustainability characteristics of those assets;

   2. (b)

      the standard which the manager relies upon under ESG 4.2.4R(2)(b) including:

      1. (i)

         the basis on which that standard is considered to be appropriate for the purposes of determining the assets the product invests in (in accordance with its sustainability objective); and

      2. (ii)

         the name of either the specific function within the manager’s business or the third party that carried out the assessment; and

   3. (c)

      the proportion of assets (which may be expressed as an approximate figure or range) that are invested in accordance with the sustainability product’ssustainability objective, as well as the types of assets that are not invested in accordance with that objective, and the reason(s) for that;

4. (4)

   where the sustainability product is an index-tracking product, how the index provider’s methodology for index-construction aligns with the product’s sustainability objective;

5. (5)

   details of the manager’s policies and procedures to monitor the performance of the sustainability product in achieving its sustainability objective;

6. (6)

   details of the KPIs that the manager will use under ESG 4.2.4R(3) and/or other metrics a retail client may reasonably find useful in understanding the manager’s investment policy and strategy for the product;

7. (7)

   details of the manager’s investor stewardship strategy and resources in relation to supporting the achievement of the product’s sustainability objective, including:

   1. (a)

      where relevant, whether the manager is a signatory of the UK Stewardship Code 2020, published by the Financial Reporting Council; and

   2. (b)

      how the manager will apply its strategy and resources in a manner consistent with achieving the sustainability product’ssustainability objective; and

8. (8)

   details of the actions the manager will take in accordance with the requirements of ESG 4.2.9R(6).

1In addition to the information set out in ESG 5.3.3R, a manager must also include the following information in the pre-contractual disclosure for a sustainability product:

1. (1)

   where the manager uses the sustainability label ‘sustainability improvers’, it must include the following information:

   1. (a)

      the timescale identified in ESG 4.2.15R(1) and the short and medium-term targets identified in ESG 4.2.15R(2); and

   2. (b)

      a summary of the types of evidence the manager has relied upon to satisfy itself that the assets in which the product invests have the potential to meet the robust, evidence-based standard set out under ESG 4.2.4R(2)(b);

2. (2)

   where the manager uses the sustainability label ‘sustainability impact’, it must include the following information:

   1. (a)

      the manager’stheory of change, with clear examples that emphasise how the manager expects its investment activities and the product’s assets to contribute to achieving a positive environmental and/or social impact; and

   2. (b)

      a summary of the method used to measure and demonstrate that the manager’sinvestment activities and the sustainability product’s assets are achieving a positive environmental and/or social impact; and

3. (3)

   where the manager uses the sustainability label ‘sustainability mixed goals’, it must include the following information:

   1. (a)

      details as to the proportion of the sustainability product’s assets which are invested in accordance with each of the sustainability objectives referred to in ESG 4.2.18R; and

   2. (b)

      in relation to the proportion invested in accordance with

      1. (i)

         the requirements for using the sustainability label ‘sustainability improvers’ under ESG 4.2.15R, the information set out under ESG 5.3.6R(1); and

      2. (ii)

         the requirements for using the sustainability label ‘sustainability impact’ under ESG 4.2.17R, the information set out under ESG 5.3.6(2)R.

1A manager must, in order to meet the requirements of ESG 5.3.3R and ESG 5.3.6R, set out the required information so that it is clearly identifiable in the pre-contractual materials relating to the particular sustainability product (unless that information is otherwise being included in Part A of the relevant public product-level sustainability report for that sustainability product in accordance with ESG 5.5.1R to ESG 5.5.4R).

1A manager must ensure that the information at either ESG 5.3.2R(2)(b) or ESG 5.3.3R(1) (as applicable), together with the information at ESG 5.3.3R(2), is located in a prominent place in the pre-contractual disclosure for the sustainability product.

1. (1)

   1A manager must prepare the reports in ESG 5.4.1R(2) in accordance with this chapter where it:

   1. (a)

      is undertaking sustainability in-scope business in relation to a sustainability product that is not a feeder fund; and

   2. (b)

      uses either a sustainability label or one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1) in relation to that product.

2. (2)

   The reports are:

   1. (a)

      Part A of a public product-level sustainability report, in circumstances where a sustainability product does not have pre-contractual materials that relate to it; and

   2. (b)

      Part B of a public product-level sustainability report in accordance with ESG 5.5.5R to ESG 5.5.12R.

1A manager that is undertaking sustainability in-scope business in relation to a sustainability product must, subject to ESG 3.1.3R, prepare a sustainability entity report, regardless of whether it uses a sustainability label or one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1) in relation to that product.

1A manager must meet the following requirements in relation to the timing and publication of Part B of a public product-level sustainability report and a sustainability entity report:

1. (1)

   A manager must produce and publish Part B of a public product-level sustainability report annually, covering a reporting period of 12 months, and must publish the first report within 12 months after the manager first starts to use a sustainability label or uses one or more of the terms listed in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1) in relation to a sustainability product.

2. (2)

   A manager must produce and publish a sustainability entity report annually, covering a reporting period of 12 months and, in relation to the first report:

   1. (a)

      where a manager meets the requirements of an enhanced SMCR firm pursuant to SYSC 23 Annex 1 8.2R paragraph 1 in relation to sustainability in-scope business, the first report must be produced and published by 2 December 2025; and

   2. (b)

      where a manager does not meet the requirements of an enhanced SMCR firm pursuant to SYSC 23 Annex 1 8.2R paragraph 1 but has assets under management in relation to sustainability in-scope business of £5bn or more calculated as a 3-year rolling average on annual assessment, the first report must be produced and published by 2 December 2026.

3. (3)

   A manager may change the reporting dates in ESG 5.4.3R(1) and ESG 5.4.3R(2) for subsequent reports following the first report, but the manager must ensure that there is no period of time which is not covered by Part B of a public product-level sustainability report or a sustainability entity report and must issue an interim report if necessary.

4. (4)

   A manager must take reasonable steps to publish Part B of a public product-level sustainability report and a sustainability entity report in a way that makes it easy for clients to locate and access, including, at a minimum, by making the most recent edition of those reports available in a prominent place on the main website for the business of the manager.

1A manager must, where it is required to prepare a public TCFD product report, include the contents of that report (or a hyperlink to it) in Part B of a public product-level sustainability report, making clear that the public TCFD product report forms part of the manager’s overall Part B of a public product-level sustainability report with respect to climate-related disclosures.

1A manager must, where it is required to prepare a TCFD entity report, include the contents of that report (or a hyperlink to it) in its sustainability entity report, making clear that the TCFD entity report forms part of the manager’s overall sustainability entity report with respect to climate-related disclosures.

1A manager must comply with ESG 5.4.7R to ESG 5.4.10R in relation to preparing Part B of a public product-level sustainability report or a sustainability entity report.

1In satisfying its reporting and disclosure obligations under ESG 5.4 and ESG 5.5, a manager must, insofar as is reasonably practicable, use the most up to date information available.

1In preparing Part B of a public product-level sustainability report, a manager must select, from within the 12-month reporting period, the most recent calculation date for which up-to-date information is available.

1A manager must not disclose metrics where:

1. (1)

   there are gaps in underlying data or methodological challenges; and

2. (2)

   these data gaps or methodological challenges cannot be addressed using proxy data or assumptions without the resulting disclosure, in the reasonable opinion of the manager, being misleading.

1A manager must ensure that Part B of a public product-level sustainability report and a sustainability entity report include an adequate explanation of:

1. (1)

   any gaps in the underlying data relied upon to make sustainability-related disclosures;

2. (2)

   how the manager has addressed these gaps, for example, by using proxy data or assumptions and briefly setting out any methodologies used in doing so, providing relevant contextual information and explaining any limitations of the approach;

3. (3)

   any metrics that the manager has not been able to disclose, on the basis that ESG 5.4.9R applies; and

4. (4)

   in respect of ESG 5.4.10R(3):

   1. (a)

      the gaps in underlying data or methodological challenges that have resulted in the manager being unable to make the relevant disclosure;

   2. (b)

      why the manager has not been able to address those gaps or challenges using proxy data or assumptions; and

   3. (c)

      what steps the manager will take to address those gaps or challenges in the future.

1 ESG 5.4.13R to ESG 5.4.15R apply to a manager in relation to preparing Part B of a public product-level sustainability report or a sustainability entity report.

1A manager may include hyperlinks and cross-references to relevant sustainability-related disclosures contained in a third party’s sustainability reporting where such information enables the manager to prepare Part B of a public product-level sustainability report or a sustainability entity report.

1The manager must set out the rationale for relying on any third-party sustainability disclosures, and any deviations between the third party’s approach and that of the manager.

1Where relevant, a manager may also draw links and refer to Part B of its public product-level sustainability report from its sustainability entity report and vice versa.

1A manager must prepare Part A of a public product-level sustainability report in circumstances where a sustainability product does not have pre-contractual materials that relate to it.

1A manager must ensure that Part A of a public product-level sustainability report:

1. (1)

   contains the information set out in ESG 5.3.3R and ESG 5.3.6R; and

2. (2)

   is made available to clients before they invest in a sustainability product.

1A manager must publish Part A of a public product-level sustainability report on the relevant digital medium for the business of the manager in a prominent place on the specific webpage or page on a mobile application or other digital medium at which the sustainability product is offered.

1A manager must ensure that it keeps the information set out in Part A of a public product-level sustainability report under review in accordance with ESG 5.1.2R.

1. (1)

   1ESG 2.3.1R to ESG 2.3.4R apply for the purposes of a manager preparing Part B of a public product-level sustainability report, where the reference to ‘public TCFD product report’ is substituted with the reference to ‘public product-level sustainability report’.

2. (2)

   A manager must:

   1. (a)

      where a manager uses a sustainability label in relation to a sustainability product, include in Part B of its public product-level sustainability report the information set out under ESG 5.5.6R; or

   2. (b)

      where a manager does not use a sustainability label in relation to a sustainability product but uses one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1), include in Part B of its public product-level sustainability report the information at:

      1. (i)

         ESG 5.5.6R(3);

      2. (ii)

         ESG 5.5.6R(5);

      3. (iii)

         ESG 5.5.6R(8) (in relation to the manager’s investment policy and strategy);

      4. (iv)

         ESG 5.5.6R(9); and

      5. (v)

         ESG 5.5.6R(10)

1In addition to the requirements at ESG 5.4.4R, a manager must include the following information in relation to a sustainability product in Part B of a public product-level sustainability report:

1. (1)

   the sustainability label that the manager is using in relation to the sustainability product;

2. (2)

   details of the product’s sustainability objective;

3. (3)

   the date of the report;

4. (4)

   details as to the product’s progress towards achieving its sustainability objective;

5. (5)

   details as to how the product invests in accordance with the manager’sinvestment policy and strategy for that product on an ongoing basis;

6. (6)

   the proportion of assets (which may be expressed as an approximate figure or range) that are invested in accordance with the product’s sustainability objective, as well as the types of assets that are not invested in accordance with that objective and the reason(s) for that;

7. (7)

   details of the sustainability product’s performance against the KPIs under ESG 4.2.4R(3);

8. (8)

   details of the relevant metrics (other than those set out in ESG 5.5.6R(7)) that a retail client might reasonably find useful in understanding the product’s sustainability objective and/or the manager’s investment policy and strategy for that product:

9. (9)

   details of the following information, where this is relevant to a retail client’s understanding of the metrics set out at ESG 5.5.6R(7) and ESG 5.5.6R(8):

   1. (a)

      relevant contextual information such as how the metrics should be interpreted and their associated limitations – for example, if particular assumptions or proxies have been used; and

   2. (b)

      historical annual calculations of the metrics in ESG 5.5.6R(7) and ESG 5.5.6R(8) after the first year of preparing Part B of a public product-level sustainability report in relation to the product that enable clients to compare the product’s sustainability performance year-on-year in a way that is easy to understand and is not misleading;

10. (10)

    details (if any) of how the manager’s approach in relation to the product deviates materially from the manager’s overarching approach disclosed in the manager’ssustainability entity report;

11. (11)

    details of how the manager’s investor stewardship strategy has been applied in relation to the sustainability product, including the activities undertaken and the outcomes the manager has achieved or expects to achieve; and

12. (12)

    details of the matters escalated (if any) in accordance with the manager’s escalation plan under ESG 4.2.9R(6).

1In addition to the information set out in ESG 5.5.6R, where a manager uses the sustainability label ‘sustainability impact’, it must also include in Part B of a public product-level sustainability report details of the progress that the sustainability product’s assets are making towards achieving a positive environmental and/or social impact, as measured in accordance with the method set out under ESG 4.2.17R(2).

1A manager must ensure that Part B of a public product-level sustainability report remains consistent with the sustainability label that is used in relation to a sustainability product, as well as the disclosures required under ESG 5.2 and ESG 5.3 in relation to that product.

1. (1)

   1A manager must prepare and provide on-demand sustainability information to a person who requests it in order to satisfy sustainability-related disclosure obligations, whether under this chapter or as a result of other legal or regulatory requirements:

   1. (a)

      within a reasonable period of time; and

   2. (b)

      in a format which the manager, acting reasonably, considers appropriate to meet the information needs of that person.

2. (2)

   A manager that receives a request for on-demand sustainability information under ESG 5.5.13R(1) must provide the information under ESG 5.4.4, ESG 5.5.1R to ESG 5.5.4 (as applicable) and ESG 5.5.5R to ESG 5.5.7R.

1. (1)

   1On receipt of a request from a person under ESG 5.5.13R(1), a manager must provide on-demand sustainability information as at a calculation date determined in accordance with ESG 5.4.8R or at an alternative calculation date where this has been agreed between the person and the manager.

2. (2)

   A manager is not required to comply with a request made under ESG 5.5.13R(1) before 2 December 2025.

1The entitlement in ESG 5.5.13R(1) is limited to one request for on-demand product-level sustainability information in respect of each sustainability product in each of the manager’s 12-month reporting periods under ESG 5.4.8R.

1In addition to the requirements at ESG 5.4.5R, a manager must, in relation to the overall assets it manages within its sustainability in-scope business:

1. (1)

   set out the following information relating to:

   1. (a)

      the manager’s approach to governance, with respect to managing sustainability risks and opportunities;

   2. (b)

      the actual and potential impacts of any material sustainability-related risks and opportunities on the manager’s businesses, strategy and financial planning;

   3. (c)

      how the manager identifies, assesses and manages sustainability-related risks; and

   4. (d)

      the metrics and targets used by the manager to assess and manage relevant material sustainability-related risks;

2. (2)

   explain, either in its sustainability entity report or in a cross-referenced public product-level sustainability report, where its approach to a particular investment strategy, asset class or product is materially different to its overall entity-level approach to governance, strategy, risk management or targets and metrics; and

3. (3)

   where relevant, briefly explain in its sustainability entity report how the manager’s strategy has influenced the decision-making and process by which it delegates functions, selects delegates, and relies on services, strategies or products offered or employed by third parties, including delegates.

1Where a manager uses either a sustainability label or one or more of the terms in ESG 4.3.2R(2) in accordance with ESG 4.3.2R(1) in relation to a sustainability product, it must, to the extent relevant to the particular product, include the following information in a clear and accessible way in a sustainability entity report:

1. (1)

   a description of the resources, governance and organisational arrangements the manager has in place, commensurate with the achievement of the product’s sustainability objective and/or the manager’s investment policy and strategy for the product; and

2. (2)

   a description of the processes in place to ensure that there is a high standard of diligence in the selection of any data or other information used (including when third-party ESG data or ratings providers are used) to inform investment decisions for the sustainability product.

1. (1)

   1If a manager is a member of a group, it may rely on disclosures consistent with those of the group or a member of its group when producing its sustainability entity report, but only to the extent that those group disclosures are relevant to the manager and cover the assets the manager manages as part of its sustainability in-scope business.

2. (2)

   If a manager relies on such group disclosures, it must ensure that its sustainability entity report:

   1. (a)

      includes cross-references, including hyperlinks, to any disclosures contained within the group or group member’s report that relate to assets managed by the manager in relation to its sustainability in-scope business on which the manager is relying to meet its disclosure obligations under this section; and

   2. (b)

      sets out the rationale for relying on the disclosure made by its group or a member of its group and why the disclosure is relevant to the assets managed by the manager in relation to its sustainability in-scope business.

1A manager must also ensure that any material deviations between its approach to governance, strategy, risk management or targets and metrics disclosed under ESG 5.6.1R(1) and the disclosures contained within the group report are clearly explained, either in its sustainability entity report or in the report made by its group or a member of its group.

1. (1)

   1If a manager or a member of its group produces a document, other than its annual financial report, which includes disclosures relating to sustainability characteristics, the manager may cross-refer to these disclosures in its sustainability entity report where this information is relevant to clients or a person who is an investor in an unauthorised UK AIF managed by a full-scope UK AIFM or a small authorised UK AIFM, including hyperlinks to where the relevant disclosures are available.

2. (2)

   Where a manager cross-refers to disclosures made by a member of its group in accordance with ESG 5.6.7R(1), it must explain in its sustainability entity report the rationale for relying on the disclosures in the supplementary document and how such disclosures are relevant to the clients or a person who is an investor in an unauthorised AIF which is a UK AIF managed by a full-scope UK AIFM or a small authorised UK AIFM of the manager’ssustainability in-scope business.

1 ESG 2.2.7R applies in relation to the preparation of a compliance statement for the purposes of a sustainability entity report as if the reference to a manager’sTCFD entity report has been substituted by the reference to a manager’ssustainability entity report.