Greenwashing clampdown coming as Financial Conduct Authority wades in
The UK’s top financial watchdog, the Financial Conduct Authority (FCA), has announced plans to fine capital-raising companies that make misleading environmental claims, as well as taking action against any external consultants – such as advertisers – that aid them in greenwashing.
The FCA supports regulatory framework for greenwashing in the financial sector/ Image via Ad Free Cities
The FCA said it has been consulting with the financial sector over its environmental, social and governance impact ratings (ESG) and says there is evidence that further regulation is needed.
“We see a clear rationale for regulatory oversight of certain ESG data and rating providers – and for a globally consistent regulatory approach informed by the recommendations on ESG data and ratings developed by the International Organization of Securities Commission in 2021,” the FCA stated today (June 30).
“We, therefore, support the government’s consideration of bringing ESG data and rating providers within our regulatory perimeter.”
The FCA and Treasury will now be required to undertake a formal consultation before drawing up any regulation of the sector, but it indicated it would look to align itself with other jurisdictions internationally.
Various UK banks have already come under scrutiny from ad industry regulation bodies, as well as climate activists, for their use of advertising in masking their true environmental impact due to their financing of fossil fuel companies.
Barclays and HSBC have both been the targets of anti-greenwashing campaigns by environmental campaigner groups for their claims.