The Financial Conduct Authority (FCA) has launched proposals to extend sustainability rules to a wider scope of investment products to tackle greenwashing.
The FCA announced new measures in November aimed at protecting retail investors by ensuring the investment products and services accurately described their sustainability goals. This included an anti-greenwashing rule requiring all firms to ensure claims are fair, clear and not misleading, which is set to come into force from May 31.
The FCA also announced the Sustainability Disclosure Requirements and investment product labelling system, which aims to help customers understand what their money is being used for and that any claims can be backed up by evidence. Both are set to come into effect for asset managers from July 31.
The FCA will also introduce a naming and marketing requirement for asset managers from December 2, which aims to ensure products cannot be described as having a positive impact on sustainability if they do not.
On Tuesday, the FCA also released guidance and examples to help firms comply with the new anti-greenwashing rule ahead of May 31. This includes advising firms to ensure claims are “clear and presented in a way that can be understood” and to think “carefully about whether they have the appropriate evidence to support their claims”.
Sacha Sadan, director of environmental, social and governance at the FCA, said: “Confirming the new anti-greenwashing guidance and our proposals to extend the Sustainability Disclosure Requirements and investment labels regime are important milestones that maintain the UK’s place at the forefront of sustainable investment. “Our good and poor practice anti-greenwashing examples will help firms market their products in the right way. “Consumers care about investing in products that have a positive impact on the planet and people. That’s why we want to boost the integrity of the market and ensure people can make informed decisions about how to invest their money.”
