Clear communication via investor factsheets helps people understand investments based on their sustainability characteristics and may help them choose investments that better meet their needs.
This paper explains the results from new trials and research into how information on sustainable investments is communicated to consumers. It finds:
- factsheets improve comprehension of the sustainability characteristics of investment products
- factsheet length, whether two and a half pages or one page, does not affect comprehension
- providing updated factsheets for all funds, not just sustainable ones, is the most effective measure, increasing consumer comprehension of important sustainability information
Cameron Gilchrist, Cherryl Ng, Patrick Sholl and Jackie Spang.
Occasional Papers contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that Occasional Papers contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.