FCA confirms anti-greenwashing guidance
Ahead of the anti-greenwashing rule coming into force on 31 May, the Financial Conduct Authority (FCA) is supporting industry with guidance to help them meet the standard.
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The new rule is designed to protect consumers by ensuring sustainable products and services they are sold are accurately described.
Results from the latest Financial Lives survey shows significant consumer interest in sustainable finance as 81% of adults surveyed would like their investments to do some good as well as provide a financial return. This work supports the long-term growth and competitiveness of the sector by helping businesses meet this demand and ensuring consumers who invest in sustainability-related financial products can make informed decisions.
The FCA is also consulting on extending to portfolio managers the requirements on how sustainable investments are labelled and explained, making consumer choice easier. These are firms that manage a group of investments for consumers, which can either be offered as standardised products or tailored services.
The proposed labelling and Sustainability Disclosure Requirements (SDR) for portfolio managers largely mirror those introduced for asset managers in November 2023. They include:
product labels to help consumers understand what their money is being used for.
naming and marketing requirements so products can only be described as having positive outcomes on the environment and/or society when those claims can be backed up.
Sacha Sadan, Director of Environmental, Social and Governance, 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. We continue to work closely with the ASA and CMA to address greenwashing.
“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.”