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FCA sets out greenwashing rules

FCA sets out greenwashing rules

The Financial Conduct Authority has moved to clamp down on greenwashing by putting in place sustainability disclosure requirements and an investment labels regime.

The UK watchdog first outlined plans for a package of measures to improve the trust and transparency of sustainable investment products and minimise greenwashing a year ago. Now, after receiving industry feedback, it has confirmed that the rules will come into effect next year.

From the end of May, an anti-greenwashing rule for all authorised firms will make sure sustainability-related claims are fair, clear and not misleading. In July, product labels will be introduced to help investors understand what their money is being used for, based on clear sustainability goals and criteria. Then, in December, naming and marketing rules for asset managers come into effect so products cannot be described as having a positive impact on sustainability when they don’t.

Sacha Sadan, director, ESG,, FCA, says: "We’re putting in place a simple, easy to understand regime so investors can judge whether funds meet their investment needs - this is a crucial step for consumer protection as sustainable investment grows in popularity.

"By improving trust in the sustainable investment market, the UK will be able to maintain its position at the forefront of sustainable finance, and capture the benefits of being a leading international centre of investment."

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