As the start date for the new anti-greenwashing rule approaches, the Financial Conduct Authority (FCA) is providing guidance to help the industry adhere to the upcoming standard.
The regulation aims to safeguard consumers by guaranteeing that the sustainability claims made about products and services are truthful and accurate.
According to recent data from the FCA’s Financial Lives survey, there is growing consumer demand for sustainable finance, with 81% of respondents expressing a preference for their investments to yield both financial and societal benefits.
The anti-greenwashing initiative is geared towards fostering the long-term development and competitive edge of the sector by aligning business offerings with consumer expectations and enhancing the transparency of financial products that are centred on sustainability.
In addition, the watchdog is deliberating on the expansion of the sustainability framework to include portfolio managers. This would standardise how sustainable investments are categorised and communicated, simplifying decisions for consumers.
The proposed requirements for portfolio managers would mirror the ones implemented for asset managers last November, including product labels that clarify the use of consumer funds and strict naming and marketing standards.
“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,” said Sacha Sadan (pictured), director of environmental, social, and governance at the FCA.
“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 (Advertising Standards Authority) and CMA (Competition and Markets Authority) 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 with their money.”
The anti-greenwashing rule will take effect on May 31.
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