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Greenwashing as fraud: UK Failure to Prevent Fraud offence, corporate exposure, and reasonable procedures for large organisations’ sustainability claims and regulatory reporting

Published on: 09 October 2025

Published by a LexisNexis Commercial expert
Legal News
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Article summary

What is the failure to prevent fraud offence?

The FTPF offence, in force from 1 September 2025, marks a major widening of corporate criminal exposure. Departing from classic corporate fraud cases that hinge on proving senior management’s awareness or participation, this route imposes liability on a ‘failure to prevent’ basis. Large organisations—those satisfying any two of: over 250 staff, turnover above £36m, or total assets exceeding £18m—can be prosecuted where an employee, agent, subsidiary, or other ‘associated person’ commits fraud to benefit the organisation. The sole defence is to show that the organisation had reasonable anti-fraud procedures in place.

How does the FTPF offence relate to greenwashing?

Its relevance to greenwashing emerges from the offences it captures. The regime covers fraud by false representation (section 2 of the Fraud Act 2006 (FrA 2006)), fraud by failing to disclose information (FrA 2006, s 3), and false or misleading statements by directors (section 19 of the Theft Act 1968), each of which can readily apply to misleading sustainability claims...

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