The FCA’s new rules for anti-greenwashing guidance have come into effect. The new rule is designed to protect consumers by ensuring sustainable products and services they are sold are accurately described.
Customers have voiced significant interest in interest in sustainable finance as 81% of adults surveyed would like their investments to do some good as well as provide a financial return.
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Figures in the industry have voiced their reaction to the rules coming into force
Paul Hamalainen, Director, Global sustainable finance and UK prudential policies at Mazars commented: “As the anti-greenwashing rule comes into force [today] it is good that the FCA has supplemented the rule with guidance [published last month] on regulatory expectations and examples of good and bad practices. In the absence of the guidance there was a genuine risk that firms would have delayed progress on sustainability for fear of tripping up.
“The four expectations are guiding lights to help firms stay within the rules. Now it is down to companies to undertake a drains-up assessment of their sustainability practices and promises to ensure they are operating in accordance with the guidelines and the requirements for public disclosure. Firms shouldn’t underestimate how long this could take.”
Richard Andrews, KPMG’s UK head of ESG, added: “While we expect the FCA to take a pragmatic approach and give authorised firms some leeway while they embed the AGR expectations, firms should not underestimate the scale of work required. They will need to be able to demonstrate that they have understood the scope of the requirements and are able to substantiate sustainability-related claims in all their communications relating to financial services and products in the UK. They also need to consider the wider implications of any claims made at firm level and the impacts these could have on the perception of their operations.
“Prioritisation of the review of existing sustainability-related comms based on a clear set of criteria and consistent guidance will be key. Firms should also focus on developing robust, forward-looking controls to ensure that future comms regarding products and services are aligned to the AGR.”
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