EY comment on the FCA’s announcement today that it is proposing new rules to tackle greenwashing

Stuart Crotaz, UK Sustainable Finance Partner at EY, comments on the FCA’s announcement today that it is proposing new rules to tackle greenwashing: “The package of measures announced today in the FCA’s consultation paper provide much needed clarity on the regulator’s approach to ESG, including measures to stamp out greenwashing. 

 “Crucially, the FCA is also proposing targeted rules for the distributors of investment products to UK retail investors. While the regulator has sought to achieve international consistency with other regimes, the proposals do diverge in some crucial aspects, such as sustainable investment labels. This will inevitably throw up challenges for firms trying to flex their business and operating models to handle both EU and UK rules. Whilst the greater clarity provided by the new approach will be welcomed by firms, it will create regulatory complexity when it comes to operating across jurisdictions. 

 “Although the proposed new regime won’t be live until 2024, together with the FCA’s Policy Statement expected June 2023 on supervisory and enforcement activity, today’s announcement clearly shows that the FCA is seeking a step-change in current practice.”