Greenwashing up on disclosure: FMA publishes guidance on sustainability-related disclosures

The Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) has now published its guidance on sustainability-related disclosures, following consultation on the draft ethical investing guidance in 2025. Our summary of the consultation draft can be found here.

The guidance is intended to clarify the FMA's expectations about what good disclosure practice looks like, and to explain how the fair dealing provisions and disclosure obligations in the Financial Markets Conduct Act 2013 (FMCA) apply to sustainability-related claims. The guidance is relevant wherever products are positioned using sustainability criteria, including managed investment schemes and KiwiSaver funds.

 

What has changed?

The updated guidance does not change the four underlying principles proposed in the draft guidance, being that claims need to be clear, substantiated, consistent, and supported by effective management of third-party involvement.

However, it does make a number of refinements in response to submissions received on the consultation draft, including:

• Changing the terminology from ethical investing disclosure to sustainability-related disclosure to better describe the scope of the guidance and align with international practice, and burying the term "integrated financial product".
• Removing the "financial advice about ethical investing" section so that the final guidance is more targeted, fit for purpose and focused as guidance for issuers.
• Providing a broader range of examples to help illustrate the FMA's expectations in a wider range of products and strategies, while clarifying that examples do not intend to impose additional legal obligations.
• Clarifying that the implication of including a link to the issuer's website in a product disclosure statement (PDS) is that the linked website is incorporated into the disclosure. Note that the FMA has updated the guidance to clarify that it is just the linked information (generally a webpage) on the website that is incorporated – not the entire website.
• Providing guidance for what the FMA considers good practice around the use of Māori values and terms as part of sustainability-related disclosures.
• Updating the "active ownership" section to refer to "stewardship", which is a broader umbrella term describing a wider range of activities that could be undertaken to influence or encourage sustainable corporate behaviour.

 

Our view

We are pleased to see that the FMA has been particularly responsive to submitter feedback, and we think that the industry will greatly benefit from having access to clear and practical guidance that is aligned with, and relevant to, market practice that has evolved since the publication of its predecessor.

We are also pleased to see that the FMA updated its guidance clarifying that the linked webpage (rather than the website) is incorporated into the disclosure.

In addition to the recommendations set out in the guidance, if issuers elect to include a webpage link to their sustainability-related investment strategy in their PDS, they should:

• Have the relevant webpage reviewed as if it were part of the PDS itself, and ensure that it is worded in a clear, concise, and effective manner.
• Ensure that the link is to a specific page relating to the relevant disclosure item, rather than to a generic homepage or to a page that contains other information.
• Consider the location of the link – there are specific rules about where additional information that does not form part of the prescribed content can be placed in the PDS and what prescribed content can and cannot be incorporated by reference.

To read the guidance in full, see: Sustainability-related disclosure guidance. 

Our team would be very happy to discuss any questions you may have in relation to sustainability-related disclosures. For more information, contact your usual DLA Piper expert.