Helix, by Sowmy VJ

Helix, by Sowmy VJ

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Helix, by Sowmy VJ
FCA's Anti-Greenwashing Rule
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FCA's Anti-Greenwashing Rule

A New Era for ESG Accountability in Financial Services

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Sowmy VJ
Jun 20, 2024
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Helix, by Sowmy VJ
FCA's Anti-Greenwashing Rule
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In an age where environmental consciousness is no longer optional but imperative, regulators worldwide are stepping up to ensure that the financial sector plays its part in the global sustainability agenda. The UK's Financial Conduct Authority (FCA) has long been at the forefront of this movement, and on 31 May 2024, it took a significant stride forward with the implementation of its much-anticipated anti-greenwashing rule. This blog post delves into the implications of this new rule for compliance, accountability, and the future of Environmental, Social, and Governance (ESG) practices in the financial services industry.

Understanding the New Rule

The anti-greenwashing rule, enshrined in Chapter 4.3 of the FCA Handbook's ESG module, is a cornerstone of the broader Sustainability Disclosure Requirements (SDR) regime. It's a clear manifestation of the FCA's unwavering commitment to ESG principles and its support for the UK Government's ambitious net-zero target by 2050.

person holding two clear plastic disposable cups
Photo by Brian Yurasits on Unsplash

What sets this rule apart is its expansive reach. It applies to all FCA-authorised firms that communicate with clients in the UK about products or services, or that communicate or approve financial promotions to individuals within the UK. The rule's essence is simple yet profound: any reference to the sustainability characteristics of a product or service must be consistent with its actual attributes and presented in a fair, clear, and non-misleading manner.

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