Oct 26, 2022
UK takes aim at company 'greenwashing'
Oct 26, 2022
Britain's financial watchdog on Tuesday proposed rules against "greenwashing", or deceptive claims by businesses about the environmental impact of their products or climate actions.
The Financial Conduct Authority said it was proposing regulations, including investment product sustainability labels and restrictions on terms such as "green", "sustainable" and "ESG" (environmental, social, and governance).
"Greenwashing misleads consumers and erodes trust in all ESG products," said Sacha Sadan, an FCA director.
"Consumers must be confident when products claim to be sustainable that they actually are. Our proposed rules will help consumers and firms build trust in this sector."
The FCA is running a consultation on its proposals until January 25, ahead of publishing final rules by the end of June.
Last week, a British watchdog hit out at HSBC for adverts promoting its green initiatives that failed to highlight the bank's contributions to greenhouse gas emissions.
The Advertising Standards Authority banned further use of HSBC posters that appeared a year ago ahead of the COP26 climate summit hosted by Britain.
HSBC insisted that the financial sector had "a responsibility to communicate its role in the low carbon transition to raise public awareness and engage its customers".
But it also acknowledged the need to "consider how best to do this" as it delivers on the bank's "ambitious net zero commitments".
UK multinationals seeking to meet a British government target of net zero carbon emissions by 2050 are frequently accused of "greenwashing" by environmentalists.
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