In brief
Greenwashing refers to the practice of making exaggerated, misleading or unsubstantiated claims in relation to the sustainability credentials of financial products and services. The risk of greenwashing claims has risen significantly in recent years, in tandem with investor demand for more sustainable investment products. This has been evidenced not only by well-publicised enforcement action both in Europe and the UK, but also by a flurry of recent claims by NGOs against financial institutions.
For a number of years, the FCA has commented that firms’ claims about their sustainability credentials must be “accurate”, “reasonable” and “substantiated”. It is therefore no surprise that the FCA recently designated “tackling greenwashing” as “a core regulatory priority”, and introduced a new anti-greenwashing rule as part of its wider package of sustainability disclosure requirements.
The publication of the FCA’s recent guidance consultation on the anti-greenwashing rule, alongside its recent comments on how UK authorised fund managers are embedding its “guiding principles”, make this an opportune time for investment managers that are exposed in some way to the UK to look closely at how the new anti-greenwashing rule could affect fund distribution and investor-facing communications.
In our latest article appearing in edition 137 of the AIMA Journal, we explore what the FCA’s guidance consultation will mean for the investment management industry. Click here to read our article.
Author
Caitlin McErlane
Caitlin McErlane is a partner in Baker McKenzie’s Financial Services & Regulatory Group in the London office.
Caitlin's practice focuses on advising a range of global financial institutions on complex and high value regulatory matters. She advises banks, major corporates, payment institutions and asset managers on navigating UK and EU financial services regulation. She has particular experience in advising clients on regulatory implementation projects, day-to-day compliance issues, and regulatory issues arising in the context of large-scale transactions. She also expertise in the areas of banking and wholesale financial markets regulation, in particular in the FX and fixed income space, alongside experience advising market infrastructure providers, including major international exchanges, trading platforms, clearing systems and payment services providers, on a variety of compliance issues.
Caitlin is also a member of the Baker's ESG and sustainability taskforce, and advises a range of clients on the drafting and implementation of ESG policies and the implications of becoming a signatory to the UNPRI and the Stewardship Code. Caitlin is an authority on regulatory reforms in the sustainability space and sits on a number of trade association working groups. She has recently been interviewed by Climate Action on her work and is a frequent speaker on the subject.
Author
Shaneil Shah
Shaneil Shah is a senior associate in the Financial Services Regulatory Group in the London office.
Shaneil provides strategic regulatory advice to clients across the regulated sector, with a particular focus on the regulations applicable to fund managers, investment firms, market infrastructure, banks and insurers. He advises clients throughout their regulatory lifecycle, from pre-authorisation, through to business expansion and on responding to new regulatory developments. Shaneil also advises on contentious matters, including investigations and enforcement proceedings brought by financial regulators, internal regulatory investigations and financial services disputes.
Shaneil has particular experience advising clients on complex regulatory implementation projects, and has worked closely with a number of asset managers to launch novel products for both retail and wholesale investors. He also advises a wide range of clients on developments in ESG regulations, including the EU’s SFDR and Taxonomy Regulations and the UK’s ESG regime.
Shaneil has undertaken secondments to the London branch of a global investment bank (focusing on contentious matters) and to Baker McKenzie in Hong Kong.
