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April 29, 2024

Melanie Wadsworth Speaks with IFLR on the UK Financial Conduct Authority’s Anti-Greenwashing Rule

London-based corporate partner Melanie Wadsworth spoke with IFLR on the UK Financial Conduct Authority’s (FCA) anti-greenwashing rule and guidance, which aims to provide clarity amid industry-wide ambiguities that have arisen during implementation efforts within the financial services sector.

The rules require businesses to ensure that any claims regarding environmental or social characteristics of their goods or services are consistent, fair, clear, and not misleading. In response, Wadsworth said “The challenge is not in the rule itself, which is not ground-breaking, but in its application.”

She expressed concern for substantiating sustainability claims, “The challenge is to work with clients to ensure that no important information is omitted and that the full life-cycle of the product or service has been taken into account.”

Wadsworth also said, “Determining whether a sustainability claim is ‘capable of being substantiated’ needs careful thought and firms need to determine whether the evidence they have to back up such claims is sufficiently credible and robust.”

“In the UK, we have already seen the Competition and Markets Authority (CMA) taking increased action against businesses that make environmental claims and the FCA makes it clear that they will be working closely with the CMA on areas where their responsibilities align,” she shared.

The full article is available to IFLR subscribers.

Full Article

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