UK retail sustainable fund changes: assessing the impact of SDR (mid year round up, 2025)

If you have found your head somewhat spinning when thinking about retail sustainable investment (and related) fund options recently you are not alone…

This research highlights changes in UK the sustainable, responsible and ethical fund market during the first half of 2025, when the SDR Naming and Marketing rules came into force, SDR labelling increased, portfolio labelling was paused –  and geopolitics generally threw a wide range of spanners into the works.

This information has come from our (free to use) retail sustainable investment fund database ‘Fund EcoMarket’ database which lists all relevant retail options.

The filters include a section which shows funds’ SDR label status. 

Fund EcoMarket currently lists 1249 sustainable, responsible and ethical funds and portfolios across various retail product options.

Additions and removals:

Summary: not many additions during 1H 2025, but a large number of deletions

During the first half of the year, 10 new entries were added:

• 1 OEIC, 3 SICAVs, 1 Investment Trust, 2 Pensions, 2 VCT/EIS/EIS, 1 ‘Other’

95 relevant investment options closed and / or were removed from the front end of Fund EcoMarket following instructions from managers, the product split was:

• 27 OEICS
• 17 SICAVs
• 10 Inv Trust
• 13 ETFs
• 11 Life
• 16 Pensions
• 0 DFM
• 1 VCT/EIS/SEIS

Name changes across retail ESG, sustainable, responsible and ethical options H1/25

Summary: A massive 285 funds changed name between 1 January and 30 June 2025

These comprised:

• 88 OEICs
• 62 SICAVs
• 1 Investment Trusts
• 49 ETFs
• 1 Charities
• 25 Life
• 59 Pension
• 0 DFM

Mapping these name changes to strategy differences (split by product areas)  threw up some interesting findings also…

SRI Services has been segmenting funds according to our own SRI Styles fund classification methodology – for since 2010.  The purpose of these classifications is to help people understand core fund strategy differences.  The methodology groups options together that have broadly similar sustainable/responsible (etc) strategies. (There are common combinations of approaches.  Most funds do ESG integration research and have responsible ownership – however areas of focus and selection methodologies vary).

Name changes mapped to product and strategy variations (January – 30 Jun 2025) 

Key findings:

Funds with a ‘sustainability tilt’ style have been significantly impacted by rule changes

Analysis of the changes made this year showed that 76 of the funds (and other options) we regard as having a ‘Sustainability tilt’ SRI Style changed their names Q1/2 2025.

These are funds that we regard as ‘mid-market’ – as they focus on underweight/overweighting led sustainability strategies – often alongside stewardship activity.  (This is out of the 96 OEICs, 56 SICAVs and 36 ETFs – total cohorts – listed within that style).

This points to the significant impact of SDR (and other) rule changes on tilted type funds – as over three quarters of ‘Sustainability tilt’ style OEICs and SICAV’s options that we list have changed their names this year. (We aim to list all relevant fund options).  This is not a surprise – but it is interesting to see the data.

These are however by no means the only funds that were impacted.

Funds that we classify as ‘Sustainable style’ (ie with a clear and significant emphasis on sustainability issues and or outcomes) were also impacted.

19 of 88 OEICs in our ‘sustainable style’ group changed their names also (just under one in five) – again, this is likely to be largely in response to SDR’s Naming and Marketing rules as only labelled funds can use the word ‘ sustainable’ in their name now.

Fund EcoMarket listed 305 OEICs in total (as at 30 June 2025) – across all styles.

Full current numbers are live on the Fund EcoMarket filters, linked here.

Numbers of funds with SDR labels (as at 30 June 2025)

Our research indicates the following numbers of funds with SDR labels.

The two columns show options that are ‘Visible on Fund EcoMarket’ (names that are public knowledge) and ‘Total’ (this includes the funds that are visible plus those that are currently being held back by fund managers):

Probably the most important data from above are:

• SDR labelled funds – 109 are currently visible on the front end of Fund EcoMarket – ie currently being used by fund managers.
  • This number rises to 135 in total when we include options that are not yet being publicised by fund managers.
• Unlabelled with sustainability characteristics: 208 additional fund options are currently visible on the front end of Fund EcoMarket which have opted for the ‘unlabelled’ SDR category.  These funds are likely to be relevant to clients with an interest in this area – but have chosen not to adopt a label.
  • In total we know of 220 funds of this kind (12 are not yet publicly displayed).

The ‘Unlabelled with sustainability characteristics’ segment is diverse. (This group are required to published the same SDR disclosures as labelled funds). Mapping these to our SRI Styles classification system shows the following:

• 24 ‘unlabelled’ options are funds that we classify as ‘Ethical’ – a cohort that has always given serious consideration to environmental and social issues,  and so (theoretically at least) could be brought into the labelling regime.
• 65 ‘unlabelled’ options are funds that we classify as ’Sustainability Tilt’ – a cohort I would suggest includes options that could apply for an SDR label (perhaps ‘Improver’) – if agreement can be reached.
• 19 ‘unlabelled’ options are funds that we classify as ‘ESG Plus’ – meaning that they lean into ESG risk management, alongside having additional sustainability characteristics. Again, I would suggest that at least some of these could achieve labels – if regulators and fund managers can find a way through.

What does all this change mean for wealth managers, financial advisers and others?

In brief – quite a lot.

Before SDR landed in November 2023, we knew there were issues with trust in this area, and that guardrails were needed.  SDR was a response to this need, and is increasingly reshaping the market.

The rules may be (in my view) overly complex and imperfect in places (notably the labelling implementation), but there are also many positives.  It is too early to predict where this will all land.

Over the last six months fund managers have responded in a range of ways – in order to comply with the new rules.  Their choices have been informed by a combination of their existing strategies and (in many cases) their engagement experience with the FCA’s labelling implementation process.

There are therefore a number of areas that advisers and wealth managers might like to think about – including the fact it is ‘early days’.

Beyond looking at, and congratulating funds that have achieved labels (which is no mean feat), intermediaries might also look at the 40 in scope funds that we classify as ‘Sustainability Style’  (ie where a fund’s interest in sustainability is clear, and deep) but no SDR label has been adopted.   In most cases these will be serious options that align to the purpose of SDR, if not the way it is being implemented.  These funds will have designed for clients with a significant interest in sustainability.

There are also many Environmental, Social and Ethical options that should be considered alongside labelled funds also, although their strategies are likely to be somewhat different (the clue is in the style name😊).

A further complication for intermediaries is that SICAVs and portfolios remain out of scope of SDR.  Both of these will be addressed in due course.

As such, it remains important that intermediaries look at labelled, unlabelled and out of scope funds when researching funds for clients with an interest in sustainability.

Put differently – when you see that a fund has an SDR label it tells you a great deal.  The manager will have done a huge amount of work, and the fund will meets certain stringent requirements – however the lack of a fund label does not, yet, in practice, mean all that much.

A further important factor is that strategies vary within, across and beyond the labels.  The FCA (rightly) does not dictate screens, themes, objectives, KPIs or where a fund can invest (although they do ask questions about these as part of the labelling process).

Whether labelled or unlabelled – not all funds will, for example, exclude coal, oil and gas majors, have biodiversity strategies, measure positive impacts and or exclude weapons.   So please do not ‘assume’ that a fund does as you might expect.  Opinions vary.

The filters on the Fund EcoMarket database will help you find options that do such things.  Both the app and the web version are free to use(search ‘Fund EcoMarket’), thanks to our partners.

Please be aware that the SRI Styles classification are our own opinions, based on humans reading fund information (!).  This is the only element of our database that is not supplied by fund managers.  We are not regulated. This ‘for information only’ – not advice.

Julia Dreblow

Founder SRI Services & Fund EcoMarket

www.FundEcoMarket.co.uk

Vice chair of the FCA established Adviser Sustainability Group

Technical author of the new sustainable fund standard – BSI PAS 7342

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The above text is based on an article submitted to and published by Portfolio Adviser / PA Future this week – who we thank for sharing this information with their readers.