In brief
Greenwashing refers to the practice of making exaggerated, misleading or unsubstantiated claims in relation to the sustainability credentials of financial products and services. The risk of greenwashing claims has risen significantly in recent years, in tandem with investor demand for more sustainable investment products. This has been evidenced not only by well-publicised enforcement action both in Europe and the UK, but also by a flurry of recent claims by NGOs against financial institutions.
For a number of years, the FCA has commented that firms’ claims about their sustainability credentials must be “accurate”, “reasonable” and “substantiated”. It is therefore no surprise that the FCA recently designated “tackling greenwashing” as “a core regulatory priority”, and introduced a new anti-greenwashing rule as part of its wider package of sustainability disclosure requirements.
The publication of the FCA’s recent guidance consultation on the anti-greenwashing rule, alongside its recent comments on how UK authorised fund managers are embedding its “guiding principles”, make this an opportune time for investment managers that are exposed in some way to the UK to look closely at how the new anti-greenwashing rule could affect fund distribution and investor-facing communications.
In our latest article appearing in edition 137 of the AIMA Journal, we explore what the FCA’s guidance consultation will mean for the investment management industry. Click here to read our article.
Author
Caitlin McErlane
Caitlin is a partner in Baker McKenzie’s Financial Services Regulatory practice group, based in the London office.
Caitlin's practice focuses on advising a range of global financial institutions on complex and high value regulatory matters. She advises banks, asset managers, major corporates and payment institutions on navigating UK and EU financial services regulation. She has particular experience in advising clients on regulatory implementation projects, day-to-day compliance issues, and regulatory issues arising in the context of acquisitions, restructurings, and divestments within the financial services sector. Caitlin also advises market infrastructure providers on markets regulation and the provision of cross-border trading solutions.
Caitlin leads our London office’s ESG regulatory work for financial institutions, and advises a range of clients on the drafting and implementation of ESG policies and structuring ESG-focused investment products. Caitlin is an authority on regulatory reforms in the sustainability space and sits on a number of trade association working groups.
Caitlin has been recognised as a "Leading Partner" by The Legal 500 UK, where she is cited by clients as "a great lawyer [who] has a photographic recollection of regulations which makes her an amazing resource for any tricky topic." She is ranked by Chambers for financial services regulation, where clients describe her as "an expert in her field", a "phenomenal regulatory lawyer" and "a highly responsive and excellent communicator" who "consistently provides pragmatic solutions that are within the regulatory framework". Caitlin is also acknowledged by Legal 500 as a Next Generation Partner in Real Estate Funds.
Author
Shaneil Shah
Shaneil Shah is a senior associate in the Financial Services Regulatory Group in the London office.
Shaneil provides strategic regulatory advice to clients across the regulated sector, with a particular focus on the regulations applicable to fund managers, investment firms, market infrastructure, banks and insurers. He advises clients throughout their regulatory lifecycle, from pre-authorisation, through to business expansion and on responding to new regulatory developments. Shaneil also advises on contentious matters, including investigations and enforcement proceedings brought by financial regulators, internal regulatory investigations and financial services disputes.
Shaneil has particular experience advising clients on complex regulatory implementation projects, and has worked closely with a number of asset managers to launch novel products for both retail and wholesale investors. He also advises a wide range of clients on developments in ESG regulations, including the EU’s SFDR and Taxonomy Regulations and the UK’s ESG regime.
Shaneil has undertaken secondments to the London branch of a global investment bank (focusing on contentious matters) and to Baker McKenzie in Hong Kong.
