FCA takes stance on greenwashing

The FCA has published a new consultation paper, aimed at protecting consumers and retail investors from greenwashing by increasing transparency and consistency.

Final legislation would apply to all FCA-regulated firms and focus on sustainable investment labels and their qualifying criteria, product and entity-level disclosures, as well as naming and marketing rules.

According to the regulator, final legislation will not be in place before 30 June 2024 at the earliest.

What’s on the table?

Initially, proposed legislation should cover the following:

• Sustainable investment labels
• Consumer-facing disclosures
• Detailed product-level disclosures
• Pre-contractual disclosures
• On-going sustainability-related performance indication
• Sustainability entity reports
• Naming and marketing rules
• Requirements for distributors
• A general 'anti-greenwashing' rule

Sustainable investment labels
The FCA proposes a distinction between three different types of investment, based on intentionality.