The UK's Financial Conduct Authority is to host an international operational forum aimed at developing tools to tackle the rising tide of greenwashing in financial services.
The 'Greenwashing TechSprint' is an initiative of the Global Financial Innovation Network, a cross-border regulatory sandbox for firms testing innovative financial products, services or business models across multiple jurisdictions.
Hosted on the FCA’s Digital Sandbox, the TechSprint aims to bring together international regulators, firms and innovators to address the growing number of investment products marketed as ‘green' of making wider sustainability claims.
Exaggerated, misleading or unsubstantiated claims about Environmental Social and Governance (ESG) credentials damage confidence in these products and the FCA wants to ensure that consumers and firms can trust that products have the sustainability characteristics they claim to have.
In October, The FCA proposed a package of new measures including investment product sustainability labels and restrictions on how terms like ‘ESG’, ‘green’ or ‘sustainable’ can be used. The outcomes from the TechSprint will help inform and develop those rules.
The UK watchdog is among 13 international regulators to have so far signed up for the TechSprint and has invited all UK-based firms, interested in participating, to apply from 17 April 2023. The application window will remain open for 4 weeks.
The TechSprint will launch on 5 June and will run for 3 months, ending with a showcase day in September 2023.