The Financial Conduct Authority (FCA) has issued guidance to financial institutions regarding green claims for financial products, aiming to combat greenwashing practices in the industry.
This guidance precedes the implementation of an anti-greenwashing rule set to take effect on 1st May.
The FCA’s guidance outlines criteria for financial institutions to ensure that the environmental and social impact claims associated with their products are accurate and substantiated.
The regulator aims to protect consumers by ensuring transparency and reliability in the marketing and labelling of sustainable financial products.
In addition to the guidance, the FCA has proposed extending these regulations to include portfolio managers, thereby broadening the scope of oversight to encompass a wider range of financial services.
Portfolio managers, who oversee investments on behalf of clients, would be subject to similar labelling and disclosure requirements as asset managers.
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.”
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