UK's FCA to crack down on greenwashing

Written by Adam Cadle

10/02/2023

The UK’s FCA is to target “outlier firms” over their ESG and stewardship practices as it looks to crack down on greenwashing concerns.

In a Dear CEO letter to asset managers published on 3 February, the FCA said it will test whether firms deliver on the ESG claims to investors, paying particular attention to those asset managers that have previously been targeted for “ongoing surveillance”.

“Our supervisory activities will focus on the governance structures that oversee ESG and stewardship considerations, and we will test whether firms deliver on the claims made in their communications with investors,” Camille Blackburn, director of wholesale buy-side at the FCA, said.

“We will particularly focus our supervisory activities on outlier firms that have been identified in previous supervisory activities or other ongoing surveillance.”

The FCA said it will look to ensure governance bodies are robust enough to oversee information about product development, ESG and sustainability integration in the investment process.

“Inaccurate or misleading information may negatively impact the integrity of the UK financial disclosure regime and is likely to harm consumers’ confidence to invest,” Blackburn added. “In addition, it undermines efficient allocation of capital intended for delivery to environmental and social outcomes.”

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