Few fund groups are likely to use the Financial Conduct Authority’s new ESG labels when they become available later this month, industry experts predict, as they are put off by the regulator’s strict demands and weak demand from investors.

In three weeks’ time, asset managers will be able to use badges such as ‘improvers’, ‘impact’ and ‘mixed goals’ to tout their products as green to retail customers under the watchdog’s Sustainability Disclosure Requirements.