Transcript:
The FCA’s anti-greenwashing rule comes into force at the end of this month, May 2024. The accompanying guidance was only published at the end of last month, giving firms little time to make any necessary adjustments to their sustainability claims.
The rule applies to all FCA authorised firms – in other words, nearly all financial institutions in the UK – and covers sustainability claims they make about their products and services.
In line with the FCA’s Consumer Duty and its principle of “fair, clear and not misleading”, the guidance asks firms to ensure that their claims are correct and capable of being substantiated; clear and presented in a way that can be understood; complete, without omitting important information and, if possible, including consideration of the full “life cycle” of a product, and finally, that any comparisons that are made are fair and meaningful.
The FCA has indicated that it expects its guidelines to have a minimal effect because firms already making environmental claims should be adhering to a high standard of clarity and robustness. Nevertheless, much of the industry will be seeking additional data to ensure that their claims remain in line with the spirit of the guidance.
The anti-greenwashing rule marks the first piece of the FCA’s broader Sustainability Disclosure Regulation jigsaw. Up next, from July, is the introduction of specific sustainability related labels that financial products can use and then, in December, the SDR’s naming and marketing rules come into force.
We will continue to follow the rules closely.
