UK - FCA proposes new rules to tackle greenwashing
The 25 of October, the Financial Conduct Authority (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 FCA proposes to introduce:
Sustainable investment product labels that will give consumers the confidence to choose the right products for them.
Restrictions on how certain sustainability-related terms – such as ‘ESG’, ‘green’ or ‘sustainable’ – can be used in product names and marketing for products which don’t qualify for the sustainable investment labels.
Consumer-facing disclosures to help consumers understand the key sustainability-related features of an investment product.
More detailed disclosures, suitable for institutional investors or retail investors that want to know more.
Requirements for distributors of products, such as investment platforms, to ensure that the labels and consumer-facing disclosures are accessible and clear to consumers.
The FCA is also stepping up its supervisory engagement on sustainable finance and enhancing its enforcement strategy.