ICMA welcomes the FCA’s consultation paper (CP) on its proposed sustainability disclosure requirements and investment labels. We agree that the financial services sector has an important role to play in helping the UK economy adapt to the transition to net zero and a more sustainable future.
Relatedly we welcome the FCA’s initiative to propose new rules helping consumers navigate the landscape of products offered to them by the financial services sector. We also think that the rules set forth in CP 22/20 will provide clearer guidance to asset managers on how to label and market their funds.
Greenwashing
We understand that tackling greenwashing is a core regulatory priority for the FCA. This is in line with what we observe in other jurisdictions, for example, the European Union. In the absence of an agreed definition of “greenwashing” in the financial services space, we think that regulatory guidance, such as the proposed sustainability disclosure requirements and investment labels, can prevent alleged greenwashing that happens unintentionally. Moreover, we can see how the option to challenge firms and take enforcement action against them as appropriate under the proposed “anti-greenwashing rule” could function as a deterrent against greenwashing. It would be good to better understand how the FCA intends for supervision to work in practice and what kind of action would be taken if poor conduct is observed....
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