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22 February 2023 - Greenwashing: sustainability disclosure requirements - Oral evidence

Committee Treasury Sub-Committee on Financial Services Regulations
Inquiry Greenwashing: sustainability disclosure requirements

Wednesday 22 February 2023

Start times: 2:05pm (private) 2:15pm (public)

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MPs investigate whether ‘sustainable’ investment funds are greenwashing

MPs will examine new proposals from the Financial Conduct Authority (FCA) setting out what counts as a ‘sustainable’ investment at 2.15pm on Wednesday 22 February with witnesses from industry and the regulator.

Meeting details

At 2:15pm: Oral evidence
Inquiry Greenwashing: sustainability disclosure requirements
Chief Executive at UK Sustainable Investment and Finance Association (UKSIF)
Chief Executive at The Investment Association
Associate Director of Sustainable Finance at E3G
At 3:15pm: Oral evidence
Inquiry Greenwashing: sustainability disclosure requirements
Director of Environment, Social and Governance at Financial Conduct Authority
Technical Specialist for Sustainable Finance and Stewardship at Financial Conduct Authority

The FCA proposes introducing criteria a UK investment fund needs to meet before it can describe itself as ‘sustainable’, ‘ESG’, ‘green’ or similar.

ESG (short for Environmental, Social and Governance) is a way of considering a business’s impact on society and the environment, and how transparent and accountable it is.

Following revelations that some ‘sustainable’ investments had exposure to oil and gas giants Shell and ExxonMobil, the Treasury Committee’s Financial Services Regulations Sub-Committee is likely to gather witnesses’ views on whether existing investment funds can be described as greenwashing.

The MPs may also explore whether tighter regulations could drive funds away from ESG investing, and how the proposals compare internationally.

In recent correspondence, the FCA assumes that one third of funds currently claiming to be sustainable would no longer qualify for a sustainable label, and another third would decide not to use the label. The regulator argues the proposals will increase consumer trust in ESG investments.

Further information

  • The Sub-Committee takes the lead on examining regulatory proposals for financial services. It scrutinises proposals which are open for consultation from the Financial Conduct Authority (FCA), the Bank of England, the Prudential Regulation Authority (PRA), and the Payment Systems Regulator (PSR). Further information can be found here.
  • The Chair of the Sub-Committee wrote to the FCA on plans to introduce regulations around sustainability labelling on 20 December 2022. The FCA responded on 9 January 2023. Further information can be found here.

Net Zero and the Future of Green Finance

  • The Treasury Committee’s report on ‘Net Zero and the Future of Green Finance’, published in April 2021, recommended that the “FCA should consult on the merits of making climate or carbon labels for consumer financial products mandatory, as a means to encourage innovation. The FCA should consult on how best to make such labels readily and widely understood.”


The Wilson Room, Portcullis House

How to attend