This is a timely reminder to all businesses that the FCA's rules around green claims come into effect from 31 May 2024

The FCA is introducing a package of measures to help consumers navigate the market for sustainable investment products, by reducing greenwashing and improving the trust in sustainable investment products.

These involve:

  • An anti-greenwashing rule for all authorised firms to make sure sustainability-related claims are fair, clear and not misleading
  • Product labels to help investors understand what their money is being used for, based on clear sustainability goals and criteria
  • Naming and marketing requirements so products cannot be described as having a positive impact on sustainability when they don’t

The rules will be introduced in stages:

  • From 31 May 2024, firms need to ensure their sustainability references are fair, clear and not misleading and proportionate to the sustainability profile of the product and service. However, firms subject to the naming and marketing rules for asset managers are not required to meet those additional requirements until 2 December 2024.
  • From 31 July 2024, firms can begin to use a product label. Note that there is no deadline for using labels, but firms must ensure that they meet the naming and marketing requirements for products using sustainability-related terms without labels by 2 December 2024.
  • Firms must ensure they make the necessary changes to meet the naming and marketing requirements by 2 December 2024. If firms are launching new products before this date, they should still be aware of and consider these requirements.

The FCA has published the following useful graphic (part of its latest guidance) to show the implementation timetable:

All authorised firms are advised to prepare for the new anti-greenwashing rule if they make claims about the sustainability of their products or services, to ensure claims are fair, clear and not misleading. 

For more detailed analysis, see this article by Wendy Saunders, partner and Head of Financial Services Regulatory at Lewis Silkin.