What are the four new sustainability labels?

Written by Lori Campbell on 10th Jul 2024

Four new sustainability labels for investments that make a genuine positive difference to the planet and/or people will take effect from the end of this month.

The labels, created by the Financial Conduct Authority (FCA), aim to give consumers confidence that a sustainable investment product is doing what it says it is.

The four options – with none considered better than the others – reflect the different objectives and approaches of sustainable products, helping investors to decide which ones suit them best.

Here’s what you need to know.

The labels are:

Invests mainly in solutions to sustainability problems, with an aim to achieve a positive, measurable impact for people or the planet.

For example: A clean energy impact fund that finances the construction of wind farms.

  • Its objective is to increase the use of renewable energy and access to it in less developed areas.
  • Environmental impact metrics are tracked, such as the level of carbon emissions avoided.

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Invests mainly in assets that focus on sustainability for people or the planet.

For example: An educational achievement fund which focuses on investing in companies that improve young people’s educational achievement through the use of technology and innovation.

• It uses screening to avoid companies with unsustainable business plans.
• It links its investments to activities that support Goal 5 of the United Nations’ Sustainable Development Goals – Gender Equality.

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Invests mainly in assets that may not be sustainable now, but aim to make measurable improvements to their sustainability for people or the planet over time.

For example: A fund that invests mostly in financial institutions in emerging economies (developing countries) that are committed to improving their sustainability standards.

  • It engages with companies through stewardship to help bring about positive change.
  • It has a policy in place to hold companies to account if this stewardship is not achieving the intended improvements.

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Invests mainly in a mix of the other three labels – assets that either focus on sustainability problems, aim to improve their sustainability over time, or aim to achieve a positive impact for people or the planet.

For example: A green energy fund that invests in some companies already producing clean energy and others looking to scale up.

• It has the same sustainability objectives as each of the other three labels and sets out the proportions of its investments to be held in each category.

Find out more in our Good Guide to Avoiding Greenwash, free to download here. 


For trusted sustainable providers of financial products such as current and savings accounts, investments, insurance, pension funds and financial advice, see our Good Egg mark companies and the ‘Good Lists’.

Risk warning: when you invest, your capital is at risk. 

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