Jurisdiction(s):
United Kingdom and Ireland

FCA anti‑greenwashing guidance: how UK‑authorised firms must substantiate and present sustainability claims, enforcement tools, and links to SDR and investment labelling

Published on: 17 May 2024

Published by a Law360 reporter

Legal News

Article summary

The rule obliges firms to ensure that any mention of a product or service’s sustainability features is consistent, fair, clear, and not misleading. It applies whenever a firm communicates directly in the UK, including the following specific situations:

with clients in the UK about a product or service
or when it issues a financial promotion, or signs off a financial promotion for communication, to a person in the UK

Its arrival currently coincides with greenwashing being a leading enforcement focus for many regulators. Branding offerings as green or sustainable is widespread and viewed as a particularly key way to draw the attention of environmentally minded customers. In 2023, the European Commission found that 53% of sustainability claims were misleading or vague, and 40% lacked substantiation. These so-called green claims are increasingly facing ever growing scrutiny from regulatory authorities, activist shareholders, and non-governmental organisations. Forthcoming rules, tougher supervision, and climate-related litigation make greenwashing now a major concern for businesses widely across all sectors. There is increasing recognition that numerous corporate statements about positive environmental impacts, sustainability, and carbon neutrality do not truly present the full picture or are simply wrong. Given that heightened awareness, regulatory authorities are beginning to act to...

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