Top UK investment body slams FCA for jumping the greenwashing gun

Charlie Conchie

A TOP investment body has slammed the UK’s financial services regulator for moving too fast on environmental, social and governance (ESG) rules yesterday. Officials at the Financial Conduct Authority (FCA) announced plans in October to clamp down on the labelling of ESG financial products in a bid to stamp out rampant greenwashing by investment firms.

Under the proposals announced in October, firms will be forced to justify labels like ‘ESG’ and ‘green’.

However, Chris Cummings, boss of the Investment Association, told MPs in a select committee hearing that the regulator was looking to concertina the regulatory progress into a year.

“Of course we should start, but please let’s not impose the end state before we’ve been through the transition,” Cummings told the Treasury Select Committee. However, the FCA’s director of ESG Sacha Sadan hit back at the criticism, saying it was integral that investors knew what went into the products they were buying. Creating guardrails would help investors already buying the products, he told MPs.