Watchdog cracks down on greenwashing

The Financial Conduct Authority has launched industry guidance to help marketers understand the requirements of its anti-greenwashing rules, coming into force on 31 May.

The rule and new proposals outline strict marketing requirements to improve the trust and transparency of investment products, ensuring the products and services sold to consumers are accurately described.

Sacha Sadan, director of environmental, social and governance at the FCA, said the watchdog’s examples of good and poor practice will help firms ensure they market products in the correct way.

“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,” said Sadan.

The guidance follows a recent Financial Lives survey that showed 81% of adults want their investments to “do some good” as well as provide financial return.

From 2 December 2024, the watchdog will enforce naming and marketing rules for UK-based fund managers, as part of its Sustainability Disclosure Requirements regime.

The Sustainability Disclosure Requirements and investment labels regime are a package of measures, finalised in November 2023, designed to improve the transparency of investment products and minimise greenwashing.

The regulator is working closely with the Advertising Standards Authority and Competition and Markets Authority to tackle the issue.